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Multi-Lot Multi-Timeframe Position trading

  • #521
  • Nov 21, 2014 2:53am Nov 21, 2014 2:53am
Quoting Nefser
{quote} As with my reply to Buk earlier, I don't think this is relevant to this discussion. I'm sure there are other areas/threads where this question would be more appropriate. I would prefer to just continue with the way the thread is going at the moment.

pretty sure that G or anyone else would just share their view instantly =)
  • #522
  • Nov 21, 2014 3:45am Nov 21, 2014 3:45am
I'm really hoping this discussion about exits will help solidify a plan for my trading, as I have yet to come to a decision of where "I'm" happy about closing trades.

I've shot myself in the foot previously by allowing trades to go against me - not that this is a completely bad idea, but potentially leaving too much on my plate and not enough space to keep my peas away from the puddle of gravy...

Other than that, I've peeled away most of my upper trades and even made a few attempts to 'get back in' a bit early and had to close with small losses. But, it also means I'm currently left with a set of trades from below the current level and having to consider what to do with them. Coincidentally, there is a pivot point sitting right at the bottom edge of the 1h ichimoku cloud, so that will cause a bit of volatility around that level.

I expect the market may have made a decision for me about these trades before this discussion goes on much longer. ;-)


[ I've also been caught out with some orders going on near the upper end of the current trend that I will be psychologically splitting away from the remaining profitable trades that are sitting below the current market. If the market shifted low enough to dip and hold below the 1H ichimoku cloud, I'd begin a hedging process to stall/unwind those positions - If anyone wants to specifically discuss that process, it can be done in another thread. ]

-------------------------
(rather than make another post, I will just add this note here)

Quoting mk5
{quote} pretty sure that G or anyone else would just share their view instantly =)
See, you are already clouding it with repeated requests. So, what will happen in an hour? Ask again? Or tomorrow? Or the next time, or the next, or will it hit support, or is there resistance at this level, etc., etc., etc. Please do take these sorts of requests to a new/existing thread to discuss specific pairs or trading systems.
  • #523
  • Nov 23, 2014 4:29pm Nov 23, 2014 4:29pm
Very informative thread. Keep up the good work.
  • #524
  • Nov 24, 2014 9:50am Nov 24, 2014 9:50am
Quoting ozziedave
Very informative thread. Keep up the good work.
Thanks OzzieDave. feel free to contribute as you wish.
  • #525
  • Nov 24, 2014 9:57am Nov 24, 2014 9:57am
Quoting AlbinaGrande
{quote} Thanks, I think that I will let mine go overnite but not the weekend. Easy for me because I am on Demo. I will probably not look to add another at 119 just yet pending the flow of Price and momentum. This Trend is in need of some correction, but has been so strong that it could still go longer. I mean just look at the S&P. Have a good night and next few days, AG
Yes, I agree. Trying to guess the end of a trend is an exercise in futility. It's the same as trying to pick tops and bottoms. I try to just trade my method and have an exit plan for the inevitable end, which sometimes is a year after I first thought it "had" to occur.
  • #526
  • Nov 24, 2014 9:59am Nov 24, 2014 9:59am
Quoting marshalmax
{quote} I have 8 trades on this pair since 7/11 and when each gets to +200 I close half the position and ride the rest using a 2 day low as a moving SL. I also look for a massive candle closed as per G's suggestion earlier in the thread. So far I am up over 2000p still open on this pair alone. Been a good month so far considering how bad last month was.
Up 2000 pips? Sweeeet. Steady as she goes.
  • #527
  • Nov 24, 2014 10:01am Nov 24, 2014 10:01am
Quoting mk5
im looking at UJ for a entry at around 117.04 level. will that be a good entry area?
I didn't see this until the answer was probably obvious, but my opinion is that when we see 117.04 again it will be in a retracement with momentum headed down. I'd wait until price has bottomed and is returning back up to take that trade. Just my opinion.
  • #528
  • Nov 24, 2014 10:04am Nov 24, 2014 10:04am
Quoting Nefser
I'm really hoping this discussion about exits will help solidify a plan for my trading, as I have yet to come to a decision of where "I'm" happy about closing trades. I've shot myself in the foot previously by allowing trades to go against me - not that this is a completely bad idea, but potentially leaving too much on my plate and not enough space to keep my peas away from the puddle of gravy... Other than that, I've peeled away most of my upper trades and even made a few attempts to 'get back in' a bit early and had to close with small losses....
No problem. The thread will continue along it's way shortly. I was planning to take a short detour anyway to discuss risk management. In the end, it's a discussion thread and I'd like to hear from everyone who has something to say. As long as we are polite, I think everyone can get their say in.

G
  • #529
  • Nov 26, 2014 11:34am Nov 26, 2014 11:34am
It's a holiday week here in the US. I have a turkey marinating in the refrigerator. I'd expect trading to be very thin. I never have much luck trading during a holiday week, perhaps because trading is so thin and I'm probably distracted as well. I'll fire up the trading machine next week after the holiday has passed. Happy Thanksgiving to all in the U.S.
  • #530
  • Nov 26, 2014 12:00pm Nov 26, 2014 12:00pm
Quoting Graviton
It's a holiday week here in the US. I have a turkey marinating in the refrigerator. I'd expect trading to be very thin. I never have much luck trading during a holiday week, perhaps because trading is so thin and I'm probably distracted as well. I'll fire up the trading machine next week after the holiday has passed. Happy Thanksgiving to all in the U.S.
Hi G,

Good week to practice. Closed all my UJ positions on Friday for some gorgeous pips. In no small measure thanks to you, I had one of my best weeks ever.

I am going to put a turkey on the "Barbie" myself. Mrs AG says to get that thing out of the house. It is hot enough in the kitchen without tying up her oven for hours.

I will need to weigh in before my meal, AG
Do not dwell in the past, do not dream of the future, concentrate the mind.
  • #531
  • Nov 26, 2014 3:24pm Nov 26, 2014 3:24pm
Quoting AlbinaGrande
{quote} Hi G, Good week to practice. Closed all my UJ positions on Friday for some gorgeous pips. In no small measure thanks to you, I had one of my best weeks ever. I am going to put a turkey on the "Barbie" myself. Mrs AG says to get that thing out of the house. It is hot enough in the kitchen without tying up her oven for hours. I will need to weigh in before my meal, AG
Glad you had a good week AG. The goal of this thread is not just to point out good entries and exits, but to dig deeply into the logic and reasoning behind those decisions. The plan is that once the logic and reasoning is clear, any trader should be able to reproduce those results on their own. No two successful traders will trade exactly alike, but there are probably some traits that most successful traders will share like never taking a large loss, adding to winning trades, etc.

The basis of this thread is that trends sometimes exist in the market and when they do we can trade them for a profit. No pair trends predictably all the time and there are times that no reliable trends are to be found at all and all we can do is stand by and wait, confident that eventually a trend will show itself. That sounds simple enough, but it's complicated by random motions of price in the markets that masquerade as trends but are really just as random as flipping a coin 5 heads in a row.

It's always a careful balance to use wise money management and risk management to protect ourselves from large losses while still taking maximum advantage of the few good trends that we can find. This thread has now been running about 9 months and we've discussed about 20% of the things I'd hoped to cover. Going forward I'll try to be a bit more succinct in the topics we cover, but there is still a lot left to discuss.

Happy Holidays,

G
  • #532
  • Nov 26, 2014 3:30pm Nov 26, 2014 3:30pm
One of the best threads of this forum. I look forward to see what the remaining 80% brings. Keep it up.
Happy thanksgiving
  • #533
  • Nov 27, 2014 11:05pm Nov 27, 2014 11:05pm
One of the things I have struggled with in my system is when to take profit and when to be patience and let a retrace happen without panicking.

G suggested one way I can take profit is when I see a larger than normal candle and so I have been closing trades manually when I do see that. If I had 3 or 4 trades open I may close 2 or 3 of them and leave one or close all and then wait for new signal to enter again.

G also stresses using patience. This recent sideways action by UJ had me worried. I had already closed off around 2000 pips but still had 2000 pips open and in profit and with my usual 2 candle low the retrace still had some room to drop before auto stopping me out. So I waited. And waited. And today it came good. Patience is very important!
Attached Image (click to enlarge)
Click to Enlarge Name: UJ20141128D.jpg Size: 211 KB
Winners add to winning trades!
  • #534
  • Dec 2, 2014 5:52pm Dec 2, 2014 5:52pm
A question for G

How do you feel about entering a losing trade that is turning around?

I took a short on the GU a couple of days ago using the Daily charts using the low of the previous day as the auto entry short. It worked but then the following day created a large retracing candle and my trade was then around -160p. The signal still looked good for shorting and I noticed price was turning around and at around -90p I decided to experiment by entering again to capture those 90p as a "got you" for scaring me so much. I drilled down to the H1 and found the recent swing low and added another short there which triggered later in the day and is now around +30p and growing.

Do you have any strategies similar to this or do you leave losing trades that do not hit your stop until they come good before adding to them? I figured my timing was out or something fundamental happened and so why should I forfeit all those pips if I am going to end up winning anyhow.

What do you think g?
Winners add to winning trades!
  • #535
  • Dec 3, 2014 11:41am Dec 3, 2014 11:41am
Quoting marshalmax
A question for G How do you feel about entering a losing trade that is turning around? I took a short on the GU a couple of days ago using the Daily charts using the low of the previous day as the auto entry short. It worked but then the following day created a large retracing candle and my trade was then around -160p. The signal still looked good for shorting and I noticed price was turning around and at around -90p I decided to experiment by entering again to capture those 90p as a "got you" for scaring me so much. I drilled down to the H1 and...
Very good question MarshalMax. Adding to a losing trade, essentially averaging down, is a very slippery slope that I would tend to avoid. While it will work when the major trend direction kicks back in to save your trade, when it fails it fails miserably. The vast majority of my profits are generated from adding to winning trades. If you do average down and add to a losing trade, you should do so with a tight stop loss right at the point you believe the trade has already turned back in your direction. At least doing it that way, you are either right for a big win or wrong for a small loss. Remember, winning traders never lose big. They always take small losses quickly and then go on to find big wins elsewhere.

The risk is of course that price could continue it's move down for any distance since price can do anything at any time, and you'd lose twice as fast as it continues its fall. Even though I have done it on rare occasions when I was dead certain price would recover, I consider it a bad trading practice. Why add to losing trades and take on additional risk when so much more can be made by adding to winning trades with little risk? There are many stories of traders wiping out their accounts by averaging down over and over until they ran out of capital and were forced to liquidate their positions. As tempting as it may be at times, I'd advise traders against using this strategy. It's a mater of risk management. Adding to winning trades, if done properly, can never wipe out an account. Adding to losing trades has proven to lead to disaster for many seasoned traders. Good question. Thanks!
  • #536
  • Dec 3, 2014 11:47am Dec 3, 2014 11:47am
Here's an interesting formation on the monthly chart of the EU. If you've been banking big pips on EU short for the past 6 months, It might be time to stand aside here and wait to see if we get a bounce off the bottom trend line.

Monthly chart of the EUR/USD

Attached Image (click to enlarge)
Click to Enlarge Name: EU Monthly trend.PNG Size: 77 KB
  • #537
  • Dec 3, 2014 12:40pm Dec 3, 2014 12:40pm
Quoting Graviton
{quote} If you do average down and add to a losing trade, you should do so with a tight stop loss right at the point you believe the trade has already turned back in your direction. At least doing it that way, you are either right for a big win or wrong for a small loss.
This is a significant point - any additional trades put on below another one which has gone negative, generally need to be shut off sooner (potentially manual SL, as auto-SL can be hit with a flicker of the market) than normal, to avoid having to deal with two trades now going against you. Or at least you need to carefully re-assess your margin requirements, capital available and comfort level if you're going increase your overall trade size.

[ No SL for first trades - As I've mentioned before, I have an overall trading plan to hedge a trade where I feel the overall trade plan/trend is still valid, but the market has just swung against me (shorter TF - possibly temporarily, possibly not). So, if I'm down 50 on a trade and indications are that I would get a sell signal around -100 to -150 pips down, I might put in a smaller trade sell order in for that point (and below). If it get's hit, I will then be in a 'soft' selling mode (as the major trend would only be softened and not turned yet) and ready to close the smaller 'reverse or hedge' trade if the market moves back up. ]


But,even assuming you only use large, emergency SL's, you may think this sounds like adding to a losing position, but try think about it a bit differently. Consider a parallel universe where I had closed that initial trade (BE or small SL). If the market moves down and then starts to shift back up again, such as in a 5m TF (with the 15m on the verge as well) and it would be a typical buy signal...wouldn't I take it there? Yes, I would.

Therefore, in my situation where I do have another trade sitting at -50...and I see the same signal, I would still put on a buy trade. Hence, supposedly adding to a losing position, but actually just putting on a trade where the signal was a buy. That's all. The only difference for the risk element is, as mentioned above, taking a slightly tighter stance about wanting to get out of this trade, and not hang on to it and let them both go against you...and potentially repeating the process further down.*

You have to mentally separate the original trade and the new trade going on, ensure you're trading your indicator properly (and not just trying to 'get back in') and watch the later trade a bit closer. This can really work work and isn't too uncommon that where the initial trade went on 'did' look good, but the market wasn't done finishing it's move. A later position that is based on another good signal can often just be in a better position to ride up and get both it and the original trade, into the black.


* I actually have done that a number of times and it gets tricky to manage if you've put too many trades on, but having one or two isn't too bad. However, that's where I really try to draw the line now - to limit the (excessive) use of margin, which is where I've been caught out in the past.
  • #538
  • Dec 3, 2014 3:29pm Dec 3, 2014 3:29pm
"Of all speculative blunders there are few worse than trying to average a losing game. My cotton deal proved it to the hilt a little later. Always sell what shows you a loss and keep what shows you a profit. That was so obviously the wise thing to do and was so well known to me that even now I marvel at myself for doing the reverse."
-Jesse Livermore

First of all, I have to say do what works for you. If you have a method to make consistent pips in the market, don't let me or anyone else distract you from your task. That said, I have studied just about every possible hedging strategy and come to my own conclusion that they do not produce any real mathematical advantage in the Forex market. It's my humble opinion that hedging simply produces a psychological advantage by delaying a loss and providing a false sense of control, but in reality the only difference between that and exiting and taking the loss is the margin is still tied up in the hedge. I simply see it as an unnecessary complication with no real long term benefit, other than delaying the pain of loss. Of course, that's just my own humble opinion.


Another quote from Jesse Livermore:
"Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it overnight. But being wrong–not taking the loss–that is what does damage to the pocketbook and to the soul."

Soldier on.
G
  • #539
  • Dec 3, 2014 4:03pm Dec 3, 2014 4:03pm
Quoting Graviton
..........Another quote from Jesse Livermore: "Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it overnight. But being wrong–not taking the loss–that is what does damage to the pocketbook and to the soul." Soldier on. G
Hi G,

I guess that I am having trouble letting go of a soldier that I have worked hard to bring into the battle. In a strong Trend I am fantasizing that he can survive until Diversification or at least one position per week let's say if I held 2 or 3 that week, harvesting the most vulnerable first.

For example, at present I have a Sell position on GU that is trying to keep his head above water with an EO Stop 30 pips back. I do not think of this as a Hedge but rather a lull in the action by way of Freezing the position to give me time to catch my breath as it were if the Stop gets hit.

Does this make any sense at all?

AG
Do not dwell in the past, do not dream of the future, concentrate the mind.
  • #540
  • Dec 3, 2014 5:01pm Dec 3, 2014 5:01pm
I'll take a bit of a side road here to discuss risk management a bit. Risk management is the key to surviving in this business long enough to succeed. We can go through one item at a time and stop to discuss it as necessary.

Demo trading

Demo trading is the only method to trade Forex with zero risk to capital. If the size of the trades are the same as would be traded on the live account, and the exact same methods are used, the demo account should provide a fairly good representation of live trading. I always advise new traders to achieve at least 3 months of profitable trading in a row (with no cheating) before moving to live trading. As simple as this sounds, most new traders will bust several demo accounts over a period of years before they can accomplish this goal. Busting those accounts in demo rather than with real capital can save a new trader many thousands of dollars and greatly reduce the stress of learning how to trade.


Maintain reasonable expectations

Of course everyone enters trading with the expectation of getting rich overnight, but that rarely happens. Unreasonable returns flow from taking unreasonable risks. The best traders in the world carefully control their risks, and in doing so knowingly restrict their returns. They generally are performing at peak efficiency making about 25 to 30% return per year with reasonable risks. They would like to make more, and are capable of making much more, but the risks that they would have to take are not justified by the increased returns. If a trader is making 10 times what the best trader in the world is making, he wont be in this business very long.


Leverage limits

One big problem in Forex is it is too easy to overleverage. I advise not to trade more than 0.01 lot per $1,500 available margin. In most cases that will keep a trader out of leverage trouble. Just because a broker will allow a trader to trade with much higher leverage, that doesn't mean they are doing the trader a favor. Most over-leveraged traders quickly bust their accounts with a large portion of the lost money going into the brokers accounts.

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