Multi-Lot Multi-Timeframe Position trading | Page 52 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

building multi-pair multi-timeframe scanner 48 replies

Multi timeframe multi chart 13 replies

Timeframe inside current timeframe - is that possible? 2 replies

Seeing higher timeframe indicators on lower timeframe 4 replies

BUY run profit 1 lot, SELL LIMIT 2 LOT down again n BUY 1 lot - EA Reqd 5 replies

Attachments: Multi-Lot Multi-Timeframe Position trading
Exit Attachments

Multi-Lot Multi-Timeframe Position trading

  • #1,021
  • Edited 11:29am Mar 4, 2015 10:56am | Edited 11:29am
I keep two price charts, one very clean price action, which some would say is all that matters, and another with widgets and gizmos. I'll throw up some widget charts to spur some discussion. These are charts with all sorts of widgets, trendlines, indicators, weekly pivot and R1,R2 points, etc.

First the Daily EG short chart
Attached Image (click to enlarge)
Click to Enlarge Name: EG Daily Wudget.PNG Size: 50 KB


Zooming in to the EG H1 chart
Attached Image (click to enlarge)
Click to Enlarge Name: EG H1 Widget.PNG Size: 54 KB


An EN Daily chart. You'll notice I often plot Trend Lines on these charts. That's because I'm trading trends.
Attached Image (click to enlarge)
Click to Enlarge Name: EN Daily Widget.PNG Size: 59 KB


An EN H1 widget chart with stop trailing behind 2nd lower high (counting back).
Attached Image (click to enlarge)
Click to Enlarge Name: EN H1 Widget.PNG Size: 50 KB
  • #1,022
  • Mar 4, 2015 2:15pm Mar 4, 2015 2:15pm
Hi G,

you really surprised me with the many indicators. I thought you are looking more PA than all these indicators.

However my question has nothing to do with indicators. I am more interested to know your risk management in practice. You discussed it many times to take off lots. So I am sure this is a risk free trade for example on EN H1 chart. You have 3 trades open and the three SL are above the three entry price. So in worst case you close all 3 in a negative balance. We know that trade cannot go negative because your already took off many profits. And here come the interesting part. Lets say you took off 750 pips in this pair in the last 3 weeks. How much of that are you willing to risk? I thought a risk free trade should be in this case to have SL at the average price of the three positions but I see it is not like that. So you basically take into consideration your winnings until now and the open trades together. But it is not easy to decide what is the maximum value to risk from your already taken profits.

Thanks,
IBO
  • #1,023
  • Mar 5, 2015 4:02am Mar 5, 2015 4:02am
I made some pips on EURUSD short, though I began last week with the first lot short on EURGBP.

When I took profit on that, I saw that EURUSD was going far better than EURGBP, so I decided to switch the trade and put the "second lot" on EURUSD short right away at 1.1252.

This worked out well so I put the "third lot" on at 1.1129. I was considering putting it on higher but I wanted the right kind of pull back. One difficulty you sometimes get with this style is the dilemma whether to put the next lot on right away or to wait for the conditions to be right around about that level.

As we have had such a strong move down, I took the second lot off for nice profit, but have not put the "fourth lot" on yet as - again - I want to wait for a pull back.

One of the hard things about trend trading is that sometimes the price just gets away from you and you can end up waiting for a pull back that never comes. But I will certainly feel way more comfortable not adding that fourth lot yet.

This is a real life example of a trade, sorry no charts, but maybe it might help.

The main point I would share is that when you have 2 strong currencies like we had GBP and USD, its great if you can get a trade going on both, but if you cant for whatever reason, go with the one that is performing better. I'm very glad I switched to EURUSD short over a week ago, although I was more keen on EURGBP during the first lot, because it was falling whereas EURUSD was stuck in that ranging channel for so long.
  • #1,024
  • Edited 9:20am Mar 5, 2015 9:05am | Edited 9:20am
Quoting IBreakOut
Hi G, you really surprised me with the many indicators. I thought you are looking more PA than all these indicators. However my question has nothing to do with indicators. I am more interested to know your risk management in practice. You discussed it many times to take off lots. So I am sure this is a risk free trade for example on EN H1 chart. You have 3 trades open and the three SL are above the three entry price. So in worst case you close all 3 in a negative balance. We know that trade cannot go negative because your already took off many profits....
Both good points. I just threw up the widget charts to get some feedback going. Most of the time, my trades have nothing to do with widgets. They mostly just reprocess the same information as we can see in the raw price, like trendlines that can be spotted just as well by eye.

Your question of managing risk is right on point. First we must manage our risk, then worry about making pips. Trying to do it the other way around is disastrous. I had cashed in about 1/2 of unrealized gains at the time of posting those charts. So I had cashed the first lot to fund the trade, then cashed one before putting the second lot on, then another before putting the third lot on. At the time I posted those charts, I was risking all of my profits, realized and unrealized, from the short Euro trade. That was a large risk position, but I'm trying to stay in this trade longer, moving a little slower in adjusting stops. There was no risk to equity though, if I allow for the positions already cashed in. Essentially I had already made the decision to give back all 750 pips in profit if need be to stay in the trade, but I was not going to take ANY risk to my trading capital if the market proved me wrong. Fortunately, it was not that brutal. This is an aggressive strategy used to maximize gains on those super trades that only come around a couple times a year, but I am still protecting my trading capital even at my most aggressive stance. That is a requirement to stay in the game.

My belief is that this fall in the Euro represents a long term shift in the ECB policy and it will take months for this to play out. I think there is about a 75% chance that the EU will eventually fall to 1.05 and an even chance it will fall to parity. There were some spikes up when the ECB news came out this morning, but it was short lived and didn't come close to my stops. Now that the ECB and BOE news is out, I'll readjust stops, take some profits and reduce risk a bit further. Some good pull backs did occur for anyone waiting for a good opportunity to enter this trade. Typically I don't intend running more than 3 or 4 lots on these trades. My goal is just to put lots on and take profits off and widen spacing over time. The big round number of 1.1000 is the next support and I expect it to fall in a week or two. Thanks for the questions. Remember. First, manage your risks.

G
  • #1,025
  • Mar 5, 2015 9:35am Mar 5, 2015 9:35am
Quoting lemna
I made some pips on EURUSD short, though I began last week with the first lot short on EURGBP. When I took profit on that, I saw that EURUSD was going far better than EURGBP, so I decided to switch the trade and put the "second lot" on EURUSD short right away at 1.1252. This worked out well so I put the "third lot" on at 1.1129. I was considering putting it on higher but I wanted the right kind of pull back. One difficulty you sometimes get with this style is the dilemma whether to put the next lot on right away or to wait for the conditions to...
That's good news. Steady as she goes. I'm wondering what % of equity you are risking on initial entry since you had concerns just taking two short trades, EG and EU. After initial entry, your risk to equity should be virtually nothing and the only concern should be maintaining proper margin. Of course the decision to invest in the EU short rather than the EG short was a good one, but I'm wondering if that decision was made due to too large of a trade size? Is there a risk management issue there, or am I reading more into it than I should?
  • #1,026
  • Edited 11:15am Mar 5, 2015 10:59am | Edited 11:15am
So, what do you think of this?

UCad Daily

Attached Image (click to enlarge)
Click to Enlarge Name: UCad Daily.PNG Size: 40 KB


UCad H4

Attached Image (click to enlarge)
Click to Enlarge Name: UCad H4.PNG Size: 72 KB


I see attempted breakouts from this wedge formation with strong rejections of the attempts. Note that all the attempts have all been on the long side. IF (and that's a big IF) oil prices take another leg down, I'd expect a major breakout of UCad.
  • #1,027
  • Mar 5, 2015 11:20am Mar 5, 2015 11:20am
Quoting Graviton
So, what do you think of this? UCad Daily {image} UCad H4 {image} I see attempted breakouts from this wedge formation with strong rejections of the attempts. Note that all the attempts have all been on the long side. IF (and that's a big IF) oil prices take another leg down, I'd expect a major breakout of UCad.

Yeah, I've been watching that wedge for a couple of weeks. Looks tasty. Would be nice to get a breakout and then retest of the T/L
  • #1,028
  • Edited Mar 6, 2015 12:39am Mar 5, 2015 11:48am | Edited Mar 6, 2015 12:39am
Fun With Trendlines

How low can it go?

Attached Image (click to enlarge)
Click to Enlarge Name: AU Daily.PNG Size: 61 KB


IF it makes one more trip to the bottom channel, that would be another 400 pips.
  • #1,029
  • Mar 6, 2015 7:41am Mar 6, 2015 7:41am
Hi Graviton, if anything I trade too small.... the GBP just didnt feel right at that moment as a "second lot" candidate ... but here it is coming off in the end so I should have.

Glad I didnt fully exit the EU short - still waiting for that pullback!

I have been stalking USD/CAD but it just doesnt look so good - USD/JPY looks better to me, as there is so much USD/CAD resistance from 1.2550 - 1.2650.
The bearish trend line is there but its ambiguous so hard to use for a breakout.

What do you think of USD/JPY?

BOJ seem to be keen to signal "enough" for the time being, which puts me off it. But it seems to be behaving right.
  • #1,030
  • Edited 10:25am Mar 6, 2015 8:11am | Edited 10:25am
Yes, UJ obviously breaking out of it's range. I'd want to see UCad breaking above it's previous 2-24 high to get in, but it's close.

There was no way for me to know EG short would do well. I simply went for the diversification in shorting the Euro across the best pairs I could see at the time. That gave me some protection in case the US jobs numbers came out bad, or some other bad news hit the USD. Generally diversification is a good strategy, but it has it's limits. When you diversify, and a big move occurs and one pair of the diversified trade moves well and another moves the wrong way, drop the bad pair quickly. Otherwise you dilute the benefit of having made a good decision with a bad one of hanging onto a loser and hoping it will recover.

You need to have confidence in your system and yourself. Once you get rid of the fear of losing by being confident your edge will carry you to wins over the long haul, you will be able to commit to bigger and better trades. It takes time. Be patient with the market and yourself. No matter what, sounds like you made some good pips, so congrats!

We haven't talked about the psychology of trading much here. Perhaps it's time to dive into that difficult subject. The human mind is the most complicated thing we know of in the Universe. I can't claim to understand it completely, but I can share some trading attitudes that have served me well over the years. If you are up for it, we can open that discussion.

It starts with a question. I'll pose it to any reader here. What is your personal edge? How well do you understand it? 50%, 75%, 85%, 95%? To be successful in this business, we need to be the worlds leading expert in the extremely narrow field of our personal edge. We should understand our personal edge inside out, top to bottom, better than anyone else in the world. There should never be even one instant in time when we aren't absolutely certain of what we should do. It's like a chess game, we are always planning 10 moves ahead and no matter what happens, we already know what we are going to do.

We must have absolute rock solid confidence that our edge will produce profits over time. If we don't, that's where the work must begin. Any hint of doubt must be erased through research, testing, study, practice, whatever it takes. If we aren't absolutely certain that every loss gets us one step closer to a big win so we can easily shrug off any loss and move on quickly, then that is an indication of a trading psychology issue.

If we have that level of unshakeable confidence in the advantage of our edge over time, then we have gone a long way to addressing the biggest enemy of successful trading, fear. The second biggest threat is greed, but that's much easier to handle. Fear is the 500 pound gorilla that dominates our trading psychology.
  • #1,031
  • Mar 6, 2015 9:10pm Mar 6, 2015 9:10pm
Personally, I experience two types of fear while trading. First there is the fear of losing money. That is a very real fear. If I lose all of my trading capital, it's game over. I spend my golden years as a greeter at WalMart or delivering pizzas. The other fear I experience is the very natural fear of being wrong. It's not that I'm so very sensitive that can't stand being wrong. It's simply that so much of my personal identity is tied up with my trading, it's easy to interpret an adverse move of the market and the resulting loss as a personal failure of the deepest sort.

The first fear is the simplest to address. I have to be very careful to make sure that I never take risk that can wipe out my account. In fact, I need to make sure that my risks are so very low, that even if I lose every single trade from now until my last breath, it will not exhaust my trading capital. That doesn't mean all my trades have to be small, but they will be as small as they must be to ensure that I will never be wiped out by any possible or impossible string of losing trades. That takes a lot of careful planning and calculation, but it's done. I may have to take small trades, and I may have to be very selective about the trades I choose to take, but the market cannot hurt me. It has been defanged. There is no reason to fear it any longer. But there is more. I'm not just hoping I will win over the long haul. I know my edge. I know for a fact that I will win over the long haul. There is no fear of losing money because it cannot possibly happen. This is not a gamble, it is a business.

The second fear is the fear of personal failure. But now, I have a more distant view. Any single trade now means nothing by itself. It really doesn't matter if it wins or loses. The only thing that matters is that over the long haul, I will win more than I lose. There is no fear of personal failure over the loss of a single trade, or even a series of losing trades because I know my edge and I know I will succeed over a long enough period of trading. Now, I can afford to be fearless in my trading. The only other concern is to not be reckless. I can't let greed and the euphoria of winning override my risk management procedures. That could possibly reintroduce fear into my trading. So, in the end, I no longer fear losing. I don't fear the worst the markets can possibly throw at me. I only fear letting greed and the euphoria of winning taking over my decision making process, but that's a healthy fear. It keeps my risks in check.

In the end, I think anyone who has never been afraid of the markets power is very naïve. To succeed I have had to understand those fears and face them head on. When the fear was conquered, so was the market's power over me. I can't tell anyone else how to conquer their fear. I can only relate my own experience and the process I went through to get here. I can be sure though that if one trades from a position of fear, the markets will exploit those fears to destroy them. That has been the way of things since the time of Jessie Livermore and it will probably always be that way.
  • #1,032
  • Mar 6, 2015 10:36pm Mar 6, 2015 10:36pm
Graviton
A very powerful post and good thread
  • #1,033
  • Mar 7, 2015 12:51am Mar 7, 2015 12:51am
Such a wise post Graviton, you have just revealed the holy grail of trading. Keep up the good work. Many thanks, God bless.
  • #1,034
  • Mar 7, 2015 5:45am Mar 7, 2015 5:45am
Quoting Graviton
Personally, I experience two types of fear while trading...I know for a fact that I will win over the long haul. There is no fear of losing money because it cannot possibly happen. This is not a gamble, it is a business.

Excellent post again Graviton.
  • #1,035
  • Mar 8, 2015 4:38am Mar 8, 2015 4:38am
That was another series of excellent posts G, I've just caught up on from Mar 3. I have been thinking about this subject you have been discussing this week. I had 2 lots on GJ Long TP 185.00 and 4 on UJ Long TP 120.50 , I had closed my 2 EU shorts at 1.1200. I was wondering if the GJ was tapering and if I should move my SL from 183 to 184 @100 pips, and it retraced 300+ pips while I was AFK. I got out with 260 pips. UJ paid worked well, It carried on to 120.80, I'm out of UJ for now. With USD Index @ 97.72 that may change.

I just got back into EU and am 1 lot short @ 1.0852 10 pips up, I've set my TP at 200 pips to remove the process of thinking about that, so I can work on putting the next lot on at +100 pips. I spent to much time when GJ was around 184.94 wondering if I should put another lot on or wait for it to pull back, when I should have been taking 500 pips off, and looking for a re-entry.

By now UCad has taken off already so that may have to wait but GJ is trending up 1M and 1W so if because of the strong $ UJ goes up (question) could that effect GJ to go up as well. I'm still getting my head around crosses.

There was alot of great info in your recent posts, the last about Psychology especially, I enter a trade after I have found out what I need to know to make a decision to take a trade and then I'm in the trade, and my fear is I'm just going in blind and convincing myself I'm right.

The other day I had this fear and I remembered you saying in a post " Nobody knows which way the market will go, . . . at some point we have to take a risk." and I said to myself, you can worry about your decision or you can not worry, but the ultimate goal here is to get a positive result and that will feel good when it happens, so you may as well enjoy the whole trip, not just the end. Concern evaporates, outlook changes.

here's a quote that I enjoyed
Quote
I like being able to do all my trading calculations in my head, and my head isn't as snappy as it once was, so I want to keep this simple.

Happy trading guys looks like it's going to be a big week.
  • #1,036
  • Edited 6:19pm Mar 8, 2015 12:24pm | Edited 6:19pm
Quoting McPoint
...Nobody knows which way the market will go, . . .
This is absolutely true. That's because the market is not deterministic. The market is probabilistic in nature. It takes some adjustment to think in terms of probabilities. Instead of if this happens then that happens, it's more like if this happens, then that is the most probable effect. But if the outcome is a bell curve distribution, the outcome could be anywhere on the curve at any time, including a very unlikely and extremely unexpected result. Just because the probabilities favor price going up, doesn't mean it will go up on any one trade.

It's like the Casinos in Las Vegas. They may have an edge of 1% on craps, but they lose a LOT of bets. Any one bet is meaningless to them because they know if they run enough trials, they will win their 1%. When you are trading with an edge, you are like the casinos. You know as a matter of statistical math that you will win your edge over the long haul, if you can keep from getting wiped out before that happens. That's why all casinos limit maximum bet size. It is a money management technique that prevents them from getting wiped out before their edge produces a profit.

This probabilistic nature of the market means you must define and know your edge. The casinos don't guess their edge in craps. It is precisely defined. There will always be precisely 6 ways to roll a 7 in craps. It will never change so that even though they can never know what the next roll is, they always know it's part of the process of earning their quarterly profit for their stockholders. My edge is trading with the trend. There may be other edges that work, but I'm not an expert on them. I simply know that if I follow my rules, I will make a nice profit due to my edge.

Once you accept that the markets are probabilistic, trading becomes much easier.

G
  • #1,037
  • Mar 8, 2015 5:04pm Mar 8, 2015 5:04pm
Quoting Graviton
{quote} This is absolutely true. That's because the market is not deterministic. The market is probabilistic in nature. It takes some adjustment to think in terms of probabilities. Instead of if this happens then that happens, it's more like if this happens, then that is the most probable effect. But if the outcome is a bell curve distribution, the outcome could be anywhere on the curve at any time, including a very unlikely and extremely unexpected result. Just because the probabilities favor price going up, doesn't mean it will go up on any one...
This post deserves a big like, unfortunately on this site this kind of appreciation is not a possibility.

Thanks for sharing,

IBO
  • #1,038
  • Mar 9, 2015 5:57pm Mar 9, 2015 5:57pm
Quoting IBreakOut
{quote} This post deserves a big like, unfortunately on this site this kind of appreciation is not a possibility. Thanks for sharing, IBO
IBO, I'm glad you picked up on the importance of this concept. It seems simple and most people will read it and think sure, ok, so what? The concept of probability in determining the future goes well beyond trading. For instance, in physics we first learn all the formulas to calculate deterministic solutions to problems. Then after we get very good at calculating deterministic solutions, we take quantum physics and learn that there are really no deterministic solutions. Everything is a probability. This usually makes undergraduate physics students heads explode. Most will at some point just accept that the quantum calculations produce valid results, no matter how strange they seem. They perform those calculations in quantum probabilities as they were taught, never understanding why they work as they do. Very few ever completely accept that we live in a universe where outcomes are determined by probabilities rather than simple cause and effect.

Sometimes we are even startled by a low probability event happening. A TV can suddenly change channels "on it's own" while we are watching it due to a stray bit of electrical charge in an electrical circuit. There is always a very low probability that this can happen, but when it does, it can be very startling. Thinking in probabilities is a bit difficult in everyday life because there are so many low probability events to consider. It's easier to simplify and just consider very high probability events as a certain cause and effect relation and very low probability events as impossible. Unfortunately, that's not the way we make a profit in trading. To profit in trading, we must accept that there are no deterministic relationships. Everything is just a probability and by taking the most probable path to profit, we are most likely to win over the long haul. Low probability events happen every day. It's possible for someone to make a fortune trading on the alignment of the stars and planets, but It's not likely to happen. The confusing thing is that there are so many people trying low probability methods, it seems like someone is always winning with them. It's just like it seems there is always someone winning the lottery by picking their kids birthdays.

To have the best chance of winning over the long haul, we must find some way to shift probabilities in our favor enough to overcome transaction costs. I do that by simply trading with the trend. I understand completely how that works and I can explain it in simple and logical terms to anyone who is willing to listen. It can fail, a LOT, and it will, but it will succeed more than it fails for the vast majority of traders over a long enough period with enough trials. It's very hard to accept and internalize, but once it is accepted, everything else in trading gets very easy. This is the only way I know how to profit from trading. Best success.
  • #1,039
  • Mar 10, 2015 12:18am Mar 10, 2015 12:18am
EU, AU, EG trending down in ALL timeframes. Trailing stops 2 to 4 H1 lower highs back on 4 lots short each. Trades are risk free, considering 1170 pip profits taken already. UJ trending up in ALL timeframes. Trailing stops 3 H1 higher lows back on 2 lots. 1 X SL risk. Closed a 32 pip loss on UCad. Letting 1220 pip profits ride overnight. At money management limit on open trades. I'll need to take some off in profits to add anything new tomorrow. A good day at the office.
  • #1,040
  • Mar 10, 2015 5:51am Mar 10, 2015 5:51am
Quoting Graviton
EU, AU, EG trending down in ALL timeframes. Trailing stops 2 to 4 H1 lower highs back on 4 lots short each. Trades are risk free, considering 1170 pip profits taken already. UJ trending up in ALL timeframes. Trailing stops 3 H1 higher lows back on 2 lots. 1 X SL risk. Closed a 32 pip loss on UCad. Letting 1220 pip profits ride overnight. At money management limit on open trades. I'll need to take some off in profits to add anything new tomorrow. A good day at the office.

Excellent. I have a series running on U/J, E/C & E/G as well. Small one started on E/U sitting at +62 but not doing much with the AUD weakness.
I'm looking to start a A/U position as soon as my short TF's turn back down.

Many thanks again on an excellent thread Graviton.
1 trader viewing now