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  • #48,221
  • Jan 3, 2015 7:45pm Jan 3, 2015 7:45pm
Quoting adikashyap
{quote} I did not say that the trades are still open .... I did mention that all the 4 trades had the same TP, just above 1H 200 ema, which got hit .... As I implement this strategy for all my trades, will certainly post as and when same things fall in to place on any pair. On the other hand, I did post 2 GJ charts, which had 2 open trades (both taken on the same strategy) ... Here it is .... Observe cumulatively they were running at 70+ {image}


There we go... it was the GJ trade that I recall. I thought they were still open.
  • #48,222
  • Jan 3, 2015 7:50pm Jan 3, 2015 7:50pm
One more aspect of my MM ...
As and when my trades get in to 25+ pips, I start scaling in with usual standard lots ... for all future trades ...
On the other hand, if my 1st trade hits -25 (my SL), I reduce my lot size by half till I recover the 250$ loss ... If I loose 2nd trade also by -25 pips, again reduce the lot size till I recover the 375$ loss (250$ on full standard lot and 125$ on reduced lot size) ...
Hope this helps some one ..........
  • #48,223
  • Jan 3, 2015 8:03pm Jan 3, 2015 8:03pm
Quoting griffinssoul
{quote} Great work here Ballistical, adikashyap and Black Fox, I should say that Lastingwell has pointed this out previously (in the post shown below). One of the simplest ways to come to an understanding i think is to tread the 4 trades as being totally on their own - now write down a list (it will be the same as Ballistical's) - add for the total and it will come to Ballistical's total. You can only do this of course if the Lot size you have allocated for each trade is your usual standard - otherwise if you are breaking things up, e.g. 1L into...
Right ... The way Lastingwell rightly said ... Pips is confusing every one here ....
Pips wise one might be right ...
I was calculating from profit factor and dividing the profit factor by pip value ...
5000$ divided by 10$ a pip = 500 pips ....
  • #48,224
  • Jan 3, 2015 8:07pm Jan 3, 2015 8:07pm
Quoting emmanuel7788
{quote} You use the same position size for each subsequent scale-in order (trade), so this is good. You did not scale-out the first position, that is good. You protect each previous trade before you scale-in additional position, very important and it is good. regards.
I always concentrate on this aspect ...
Scale in with same position (lot size), not closing profit making trade early and protecting earlier trade/s before scaling in ...
  • #48,225
  • Jan 3, 2015 8:57pm Jan 3, 2015 8:57pm
Quoting adikashyap
{quote} Right ... The way Lastingwell rightly said ... Pips is confusing every one here .... Pips wise one might be right ... I was calculating from profit factor and dividing the profit factor by pip value ... 5000$ divided by 10$ a pip = 500 pips ....
Something is wrong with that profit, if you treat them separately as you should do because they are separate trades, they just happen to be on the same chart, and count the amount of money the broker would have given you when the trades closed,: 100 pips on the first trade would have given you $1,000 ($10 x 100) second trade would have been $750 ($10 x 75) third trade $500 ($10 x 50) and fourth trade would have been $250 ($10 x 25) add those together and you have $2500 not $5,000 and $2500 divided by $10 a pip = 250 pips. So if indeed your profit increased by $5,000 then you did something differently to what you've posted.
  • #48,226
  • Jan 3, 2015 9:35pm Jan 3, 2015 9:35pm
Quoting snarlyjack
usd/jpy update. The 4 hour bar just updated. The apb is still red & we're in the pac now. The tdi is in the wrong position. This would be a no trade for me! {image}
Thanks SJ, this along with the previous post are a great example of how you trade. This was from back in November.

I fear missing a trade more that taking the wrong trade, I'm looking forward to facing my fear and going forward with this great thread.

Thanks again
  • #48,227
  • Edited 10:44pm Jan 3, 2015 10:06pm | Edited 10:44pm
Counting R multiples in pips is also very misleading. If I put 2 full lots at the outset of a trade with a 25 pip stop loss then my initial risk is $500. If I then take one of those trades out at 25 pips in profit and move to breakeven I have then made $250 so far, if the remaining one then goes back and hits breakeven I have still made $250 a risk reward of 1:0.5 not 1:1 if it does go on instead to make 100 pips I have made $1,000 plus the $250 made earlier total $1,250 an R:R of 1:2.5 but if you do it in pips some are saying, thats a R:R of 25 pips versus 100 pips gained = 1:4 which its actually not.

I have known a lot of professional traders in my time, including some at the stock exchange in the early 80's in London when I worked for a stockjobber as they were then, and the only time I heard risk/reward was in money terms never anything else.
  • #48,228
  • Jan 4, 2015 1:54am Jan 4, 2015 1:54am
Quoting adikashyap
{quote} I always concentrate on this aspect ... Scale in with same position (lot size), not closing profit making trade early and protecting earlier trade/s before scaling in ...

adikashyap et all,

here some general remarks to this money management topic:

The pips count alone is not sufficient to measure your trading results or the performance of a trading system. The are many other factors to consider how a trading system performs. This is outside the scope of discussion in this thread.

You need to look at how you manage your trade risks when you use multiple entries and multiple exits ME/ME strategy. It is complex at first look but with enough practice it will become easier. Know the concept, work that on paper then try it in live trade using a demo account.
You need to manage your initial trade entry to Breakeven BE and then think of whether you want to add another position after the initial trade is ‘risk free’ or a ‘free trade’ what some traders call it. Whether you add the second position of same lot size or not depends on you. It need not be the same lot size as the first trade. But I use the same lot size of the first trade because I do position sizing and do not risk more than 2% for the first trade. Every subsequent added on position must have also its own risk % and do the position sizing using the same initial SL. What is important is every position must be protected with a SL.
Besides looking at the total number of pips won for each currency pair traded, there are also other parameters to look at. The pips $value being one. If you make nett win of 2500 pips overall and with the pip value of say $10 per pip, then the total amount of money is important . That is exactly what snarlyjack said in his post#47,652, look at the money. Other traders will look at the money as percentage of growth in their account.
How you want to measure your business performance is up to you. Instead of pips, you can also use R= % risk say 1%. Then, when your trade results in a total 5R, that would be 5% overall gain with position sizing being used.
For those who do not know the R-Multiple concept or still think that it is misleading, then it would better you to read up on R and R-Multiple concept explain by Dr Van Tharp. Many trading schools and coaches teach this and also many investors and traders alike adopt this concept in their business. Professional traders knows this but whether they use it or not is up to them.

Dr Van Tharp book titles / references:
Super Trader
Trade Your Way to Financial Freedom

If you have tried this R-Multiple concept and find that it does not help you in your trading business to achieve your financial goals, then please thrash it and do something else.
I traded the stock market since 1980’s and I was taught to use position sizing but never heard of the R-Multiple concept until years later. Ever since then, trading has not been the same and it has more to do with risk management of my hard earned money, how I invest and re-invest the same money I make. It has become more money management game we play in the market. The trading method being a very small part of the system is no longer the winning edge. We need to make our money work for us. Easy to say but not easy to do, that is the psychological challenge in trading and how we as traders and investors deal with and develop our mental fitness.
My advice is read what is being shared in this thread. Verify all the information shared here. There are lots of online resources available. Then decide in leaning what being shared, follow up with practice it to see how things will work. If you think what being shared here does not work for you, by all means thrash them and move on. There are many things which I read here and I learn not do follow. That’s the discretion I use being an independent trader.

regards,

Good Trading in 2015.
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #48,229
  • Edited 2:15am Jan 4, 2015 2:03am | Edited 2:15am
Dear Emm,
We know that you are a master at scaling in ... and you said you use it in position trading than on 1H ...
Small doubt here ...
Do you scale in top to bottom to bottom to top .....??????
Meaning ... do you open the 1st trade on M TF and start scaling in as and when you get confirmation in W, D, 4H or
Do you open the 1st trade on 4H and start scaling in as and when you get confirmation on D, W and M TF's?
  • #48,230
  • Jan 4, 2015 2:07am Jan 4, 2015 2:07am
emmanuel7788

Thanks for all the posts regarding Money Management, and Position Sizing, I have been reading Super Trader , slow but the book itself is important for every trader here in TMS, cant wait until later chapter to reach Position Sizing ie Money Management
I Have Learned to Take Some Losses to Make Profits
  • #48,231
  • Jan 4, 2015 2:09am Jan 4, 2015 2:09am
Quoting adikashyap
{quote} First trade would be $10 a pip (one standard lot) ... 100 pips .... 1000$ ... Second trade would be $20 a pip (2 Standard lots) ... 75 pips ... 1500$ ... Third trade would be $30 a pip (3 standard lots) .... 50 pips ... 1500$ ... Fourth trade would be $40 a pip (4 standard lots) ... 25 pips ... 1000$ ... Please understand that though the trades were opened at different price, all of them were closed at the same price ...
Hi adikashyap, perhaps you are saying you make a 2nd trade consisting of 2 Lots, a 3rd with 3 Lots etc???
  • #48,232
  • Jan 4, 2015 2:11am Jan 4, 2015 2:11am
Quoting Black Fox
{quote} Those trades were executed with perfect timing in strong downtrend with great momentum. Under "normal" market conditions, with 25 pips SL in H1 timeframe you would be whipsawed on your second or third entry. One more thing. For me, scaling-in means that each subsequent lot is smaller than the preceding one.

Good point made by Black Fox.

25 pips SL on H1 chart will not work for some currency pairs like GBPJPY, GBPAUD, GBPNZD, GBPCAD, EURAUD, EURNZD, ... where their average hourly volatility is much higher. It will work for EURGBP and you should know why.

For SL, better to use the recent swing high or swing low to place your initial SL and manage from there. Another way is to use the volatility factor to determine the initial SL. Using 2 x the ATR(10) on the trading chart TF is generally safe. When we use percentage risk (say 1%) and do position sizing, whether your SL is 50 pips or 100 pips , your initial risk remains the same. The end results in money will be different but your winning statistics will be better overall. What is important is your exit strategy and how you manage your trades. You need to differentiate TMS technical exit rules and work that into your with exit strategy.

When scaling-in positions, the trade lot size can be the same or different. You must consider the % risk and position sizing. But when you trade with fix lot size without the use of position sizing, then you must make sure you have locked in profits and use that to open more positions.

regards,
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #48,233
  • Jan 4, 2015 2:13am Jan 4, 2015 2:13am
Quoting lastingwell
Counting R multiples in pips is also very misleading. If I put 2 full lots at the outset of a trade with a 25 pip stop loss then my initial risk is $500. If I then take one of those trades out at 25 pips in profit and move to breakeven I have then made $250 so far, if the remaining one then goes back and hits breakeven I have still made $250 a risk reward of 1:0.5 not 1:1 if it does go on instead to make 100 pips I have made $1,000 plus the $250 made earlier total $1,250 an R:R of 1:2.5 but if you do it in pips some are saying, thats a R:R of 25...
Thanks lastingwell, the way i think about this is you have one trade of a certain amount of Lots and as you sell off parts the R:R will average out as you have shown by example...

"...I worked for a stockjobber as they were then" ...
  • #48,234
  • Jan 4, 2015 2:15am Jan 4, 2015 2:15am
Quoting emmanuel7788
{quote} adikashyap et all, here some general remarks to this money management topic: The pips count alone is not sufficient to measure your trading results or the performance of a trading system. The are many other factors to consider how a trading system performs. This is outside the scope of discussion in this thread. You need to look at how you manage your trade risks when you use multiple entries and multiple exits ME/ME strategy. It is complex at first look but with enough practice it will become easier. Know the concept, work that on paper...
Thanks emmanuel7788, will look up the Van Tharp book
  • #48,235
  • Jan 4, 2015 2:20am Jan 4, 2015 2:20am
Quoting griffinssoul
{quote} Hi adikashyap, perhaps you are saying you make a 2nd trade consisting of 2 Lots, a 3rd with 3 Lots etc???
I was just going to answer the post you did when I noticed I think he deleted it.

In his original post he said: After the first trade moved 25+, I moved this to BE and opened one more standard lot with 25 pip SL but same TP

But in the post you've quoted and I was going to, he has counted the pips and profit over and over again.
  • #48,236
  • Jan 4, 2015 2:27am Jan 4, 2015 2:27am
Quoting TheScorpS
emmanuel7788 Thanks for all the posts regarding Money Management, and Position Sizing, I have been reading Super Trader , slow but the book itself is important for every trader here in TMS, cant wait until later chapter to reach Position Sizing ie Money Management

TSS,

You are most welcome. I am just sharing what I learned and had worked for me.
When you want to grow an account over a given time frame, you need to look at various money management strategies out there and find one which will work for you at a comfort level.
I know many traders here trade with fix lot size and focus on the amount of pips and money win each day/ each week... and the money pay for some bills and personal expenses, etc. I have no doubt about that work for many here. Eelfranz explained how he traded with a $10,000 account and he made money this way being a retiree.

I know a trader here who trades with a $100,000 account and he grew his account smoothly and very safely in risking no more that 0.5% per trade. He does not trade for a living because he has a full time job, and he is growing that trading account to finance building his new house and also for his young children' education. His financial objectives are clear and he has made a plan to achieve with 5-Method as the core method of his system.

It is important to know about money management strategies and find one or build one which will work for you. A winning trading system which fits you must have your own money management strategy incorporated in it. MM has also to do with your personality as a trader, your risk profile, your financial position and more important it must fit your psychological profile as a trader. This is 60% and maybe more. A proven MM strategy can help reduce the stress when we trade.

regards,
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #48,237
  • Edited 3:18am Jan 4, 2015 3:04am | Edited 3:18am
Quoting emmanuel7788
{quote} adikashyap et all, here some general remarks to this money management topic: The pips count alone is not sufficient to measure your trading results or the performance of a trading system. The are many other factors to consider how a trading system performs. This is outside the scope of discussion in this thread. You need to look at how you manage your trade risks when you use multiple entries and multiple exits ME/ME strategy. It is complex at first look but with enough practice it will become easier. Know the concept, work that on paper...
Lets be clear on what I was referring to, there is nothing confusing or misleading about a 1% risk and a 5% gain being 1:5, the type of post I class as misleading, http://www.forexfactory.com/showthre...14#post7389514 and is what I'm referring to. The image I have attached again below is the one from that post that shows what I mean. You have said in the image exit one position at 1R, when in fact you are exiting 1 position at 0:5 R and you have it marked 1R 2R and 3R when in fact it is actually 0.5R, 1.5R and 2R if your position sizes are the same as each other.
Attached Image (click to enlarge)
Click to Enlarge Name: EURAUD trade example management.png Size: 47 KB
  • #48,238
  • Jan 4, 2015 3:09am Jan 4, 2015 3:09am
Quoting griffinssoul
{quote} Thanks emmanuel7788, will look up the Van Tharp book

Hi,

You will find Van Tharp's materials here in FF posted by member Fx Articles
There is a long list of more than 200 threads posted with title. Scroll through his threads till you find the titles with '... by Van Tharp'.
There are also materials by other well know traders going way back to 2006.

Have Fun.
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #48,239
  • Jan 4, 2015 3:16am Jan 4, 2015 3:16am
Quoting emmanuel7788
{quote} Hi AS, Good Morning too. I use a chart example here to explain how I move my trade to BE and scale-out position. This is not the actual trade chart which I posted earlier as I am on my home computer now and those trades are running in my VPS. We havbe to watch the PA as pricde progress and look for setups where we can add back postions with banked-in profits later. Look for price pull back and consolidation breakouts to add positions. I will post as I see them later. Also must look out for trade invalidation to bail out. {image} regards,...
http://www.forexfactory.com/attachme...1&d=1396937861

read this old post in its entirety and do not make any assumptions when you do not know all the details.

regards,
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #48,240
  • Jan 4, 2015 3:31am Jan 4, 2015 3:31am
Quoting emmanuel7788
{quote} {image} read this old post in its entirety and do not make any assumptions when you do not know all the details. regards,
I read the post in its entirety and haven't made assumptions, I have seen this type of chart before but not commented on them, but the maths remain the same. On the image you have "when price close below TP1 exit 1 position at +1R" and its not. If your whole risk is 2% if both positions go straight to the stop loss before going anywhere, your risk is 2% if you then take one of the positions out at the first level you have just added 1% = 0.5R if the second position then goes on as planned to the 2R line you have got 2% from that trade and 1% from the first trade = 3% total = 1.5R and if it carries on to the last line marked 3R you have got 3% from that trade and the 1% from the first trade = 4% = 2R.

I am not talking here about when you add positions later or anything else, simply your marking of the different levels which only works as true R:R if you have one position and don't take anything off of the trade.
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