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Multi-Lot Multi-Timeframe Position trading

  • #1,321
  • Jul 29, 2015 8:23am Jul 29, 2015 8:23am
Quoting lemming78
Good morning G and all. I'm sorry for my absrupt absence but i had some personal issues and i couldn't trade much. I need to catch everything up and i'll do by this weekend...
Welcome back Lemming. You said your good trades were just a matter of luck, but Lucius Annaeus Seneca said, "Luck is a matter of preparation meeting opportunity." It's obvious you have done much to prepare yourself to take advantage of the opportunities when they inevitably come along.

As far as taking trades for low risk, I wouldn't just look at a tight stop as being a low risk. You could trade for a few hours at 1.0 std lot and a 20 pip stop, or trade a few weeks with an 0.10 lot and a 200 pip stop and the capital risk would be about the same. Somewhere in this thread I listed a dozen or so ways to reduce risk, and stop loss size is just one of them, and probably not the most important since a tight stop carries it's own risks. Best success and stop by when you can. -G
  • #1,322
  • Jul 30, 2015 2:31am Jul 30, 2015 2:31am
Quoting Graviton
{quote} Thanks for the feedback IBO. Yes, it seems it is always feast or famine. If there are no good trades, we just can't take any. We can't force trades. We have to just be patient knowing that good trades will come our way if we are willing to wait on them. If there are too many good trades, we can only trade according to our money management. Good money management is critically important as it will keep you in the game long enough to be successful. Bad money management can wipe out an account much faster than picking bad trades. That means...
Hi G,

ok thanks for the answer, if I may I continue a Little with leverage and Money Management topic.

I had AUDJPY short open, two positions, first one running since about two weeks. Although the very long term trade is not down, the recent is shown and I entered because I believe the fundamentals also line up for south. So as you are not a signal provider I can ask the question as I already closed the trades :-) For me it is still more down however you said a good trade shouldnīt wait too long to go to the right direction. I closed today the two positions with abuot + 20-30 pips, donīt remember exactly. I am not sure what you have done.

I closed it because I rather made extra leverage free as I found a better Setup: GBPCHF long. It looks good. So for this reason I guess it is ok what I did. The question is if it was ok when I did not need the extra leverage. You also said patience is importance. Well I do have Patience on my EURNZD which is not moving since a month, but there I have very nice profits and it is no problem to wait. But I am not sure if you would wait with AUDJPY longer if the two positions combined have 20-30 pips after two weeks. Would you have closed or just waited and see?

Thanks,
IBO
  • #1,323
  • Jul 30, 2015 2:33am Jul 30, 2015 2:33am
Hi Graviton,

I read BTW the Trend Following book you suggested from MC. I do find it a very good read. After reading it I made some Research after the person. As I see he is popular in Asia and makes there many seminars. I do have a personal question though. I do not find any sign or writing that he is a trader. So how much value and respect do you give for a person who is a good trader only in theory?

IBO
  • #1,324
  • Jul 30, 2015 2:54am Jul 30, 2015 2:54am
Hi IBO,

Would you mind posting the name of the book? I may be interested in giving it a read.

By the way, long GBPCHF also! ;-)

EZ
  • #1,325
  • Jul 30, 2015 8:39am Jul 30, 2015 8:39am
Quoting IBreakOut
{quote} Hi G, ok thanks for the answer, if I may I continue a Little with leverage and Money Management topic. I had AUDJPY short open, two positions, first one running since about two weeks. Although the very long term trade is not down, the recent is shown and I entered because I believe the fundamentals also line up for south. So as you are not a signal provider I can ask the question as I already closed the trades :-) For me it is still more down however you said a good trade shouldnt wait too long to go to the right direction. I closed today...
Hi IBO. Yes, that's a sticky wicket. It depends on a lot of factors, like the volatility of the overall market. If the whole market is dead, I might have to wait much longer to make a call. If I need the capital for a better trade I'm more likely to cut a slow mover off more quickly. I'd say you gave it plenty of time if you waited for a couple weeks for it to move in your direction. You had to make a call to stay with a slow mover or deploy the capital to a trade that you thought would perform better. All things considered, yours was probably the better decision. That doesn't mean it will be right all the time, since this is really just a game of shifting probabilities into your favor. But if you can call it right just a little more than half the time you've done your job and you can earn a very good living. So my conclusion is, don't think in terms of winning and losing, think in terms of shifting the probabilities in your favor. Best success. -G
  • #1,326
  • Jul 30, 2015 9:05am Jul 30, 2015 9:05am
Quoting IBreakOut
Hi Graviton, I read BTW the Trend Following book you suggested from MC. I do find it a very good read. After reading it I made some Research after the person. As I see he is popular in Asia and makes there many seminars. I do have a personal question though. I do not find any sign or writing that he is a trader. So how much value and respect do you give for a person who is a good trader only in theory? IBO
It's a good question. Most of the things I read about trading just wouldn't work for me, and at least half are just flat out wrong. I suppose you could ask why any good trader would spend time writing a book when he could be trading for profit. Generally, I would put a lot more confidence in someone who makes most of his money trading rather than teaching, but very few of those people have the time or inclination to write about trading. On the other hand, I have known people who have made a lot of money trading and they just can't really explain how to trade to anyone else. Often, it was just pure luck and they just happened to be in the 10% of the tail of the probability curve that is very lucky and profitable. Usually those people wont take their huge winnings and retire to the Bahamas, but rather they will keep trading thinking they have found some magic formula until they have lost it all back. So, a good trader that can't explain logically why his "system" works better than just random chance is just about as useless to us as a good logical writer who has never traded successfully. You are wise to beware the charlatans. They are many and they sound so damn good. -G
  • #1,327
  • Jul 30, 2015 11:36am Jul 30, 2015 11:36am
Graviton Thanks for advice to IBO , i agree with u ,
  • #1,328
  • Jul 30, 2015 11:38am Jul 30, 2015 11:38am
Ezcurrency , i have read plenty books , only one can help is Babypips,com look at google ,all free ,
  • #1,329
  • Jul 31, 2015 3:49am Jul 31, 2015 3:49am
Quoting Graviton
{quote} That's an excellent question Terminator. I haven't found any analysis that shows which is better, a stop or a limit order. It's a bit like asking which is better, a screwdriver or a pair of pliers. They are both mechanical tools good for a purpose, but for different purposes. One thing to note is that once a stop is hit, it becomes a market order and the trade is executed at the next transaction price. In very liquid markets, that is usually very close to the stop price, but in very volatile or illiquid markets, that next transaction price...
Hi Graviton and Terminator12,

I have discussed the advantages and disadvantages of limit and stop orders with a very experienced trader. I asked him what he thinks which one is better. His answer was interesting, against the basic and most common thinking, but makes fully sense and since that I only use stop orders. (Before you go on you should know newbies believe stop orders make no sense as you get in the market for worse price while limit orders are great why you get in at better price).

I explain his wise answer with 1 example. Lets say EURUSD is 1.1000 and your analysis say it will go up. You place a buy limit order at 1.0900 to get in for a better price - which seems like it makes sense. So the experienced Trader said: "If you place an order 1.0900 and it gets filled then it means that price actually went against your analysis which was showing the trend will go up. And if price goes down now how low should it go? Why should it turn at 1.0900? Why not at 1.0300? Who knows, if it goes against you, maybe your whole analysis is wrong?" I thought about it and he is right IMO. It makes a lot of sense. So I do not use (or very rarely buy orders). If there is a retracement then I patiently wait until if it is over and the trend goes on. If it is at 1.0900 then there, if 1.0300 then there and I get in at market when get the signal.

On the other side, if you put in the same example a stop buy order at 1.1100 here is what the great Trader said: "This situation is a lot better. The trade goes in your direction, you got filled which means you had good analysis. You do not know if you win or lose at this point but it started out the way you wanted." Also true. For me clearly the lesson was to either enter with a stop order or at market price.

IBO
  • #1,330
  • Jul 31, 2015 9:08am Jul 31, 2015 9:08am
Hey Graviton,
Great thread and discussion. You may have talked about this already but does swap play any role in your trading decisions ? Some pairs with my broker carry a significant negative swap cost that would really impact profit/losses especially with multi week trades.
  • #1,331
  • Jul 31, 2015 10:01am Jul 31, 2015 10:01am
IBO thanks so much , I will use either stop order or market price ,
  • #1,332
  • Aug 1, 2015 3:09am Aug 1, 2015 3:09am
Quoting ezcurrency
Hi IBO, Would you mind posting the name of the book? I may be interested in giving it a read. By the way, long GBPCHF also! ;-) EZ
Hi EZ,

the book is called Trend Following by Michael Covel.

Ok, then we can talk "live" about our GBPCHF long trade :-)

Have a nice weekend,
IBO
  • #1,333
  • Aug 1, 2015 3:15am Aug 1, 2015 3:15am
Quoting Graviton
{quote} Hi IBO. Yes, that's a sticky wicket. It depends on a lot of factors, like the volatility of the overall market. If the whole market is dead, I might have to wait much longer to make a call. If I need the capital for a better trade I'm more likely to cut a slow mover off more quickly. I'd say you gave it plenty of time if you waited for a couple weeks for it to move in your direction. You had to make a call to stay with a slow mover or deploy the capital to a trade that you thought would perform better. All things considered, yours was probably...
Hi G,

Yes, the pair wasnīt moving I guess it cannot go up because of a very weak AUD, but JPY was also stronger some time ago so it is more like a Weak vs. Weak setup for me now. As you said earlier, there are many options out there and it is never late to join the party. The pair stays on my watchlist and if it will be clearly trending then I jump back. I do believe that pair has a huge long term potential.

What I will also do is to continue monitoring that setup and compare it to what I changed it. We will see if the decision was right or wrong.

IBO
  • #1,334
  • Aug 1, 2015 3:29am Aug 1, 2015 3:29am
Quoting Graviton
{quote} It's a good question. Most of the things I read about trading just wouldn't work for me, and at least half are just flat out wrong. I suppose you could ask why any good trader would spend time writing a book when he could be trading for profit. Generally, I would put a lot more confidence in someone who makes most of his money trading rather than teaching, but very few of those people have the time or inclination to write about trading. On the other hand, I have known people who have made a lot of money trading and they just can't really...
Hahaha, it is very true ("Why any good trader would spend time writing a book when he could be trading for profit.") In the beginning I took every book for granted and as I learnt more and more I saw how more of them do not really have much value at all. Still, there are always people who are successful and feel some commitment to share their knowledge. These are the people we look for to read books. Others want only to earn money and leave something behind them so as they have nothing better to do, they write a book :-)

IBO
  • #1,335
  • Aug 1, 2015 3:33am Aug 1, 2015 3:33am
Quoting terminator12
Ezcurrency , i have read plenty books , only one can help is Babypips,com look at google ,all free ,

Hi Terminator,

the site you mentioned is very useful, their free material is great, probably unique on the internet. Keep it in mind though when you suggest it to Ezcurrency that Babypips material is for beginners so if you want to read something more for advanced traders then you still have to stick to a book.

The forums there are however also very good, I am a member there too, and Graviton has also experience, but as he rather works here, he might see the situation a bit different :-)

IBO
  • #1,336
  • Aug 1, 2015 4:38pm Aug 1, 2015 4:38pm
Hi , I have written to Nial Fuller and he did reply , So as of now on i am going to learn Price Action only and no more indicators or E A ,
Hope i can make it .....
  • #1,337
  • Aug 4, 2015 1:28am Aug 4, 2015 1:28am
Quoting terminator12
Hi , I have written to Nial Fuller and he did reply , So as of now on i am going to learn Price Action only and no more indicators or E A , Hope i can make it .....

He has a good learning platform for newbies like myself. However you have to put more work into your own research besides having a mentor like him.
  • #1,338
  • Aug 4, 2015 1:48am Aug 4, 2015 1:48am
Hi Graviton,

Many thanks for the thread, a great read. (Callout to pipEASY too if he's out there somewhere, the millipede thread, where my first successes came from).

I'd really like to ask you some questions based on my experiences trying to ride the trend like you do - anything you can suggest would be appreciated. Where to begin...

I had some success with an approach based on the millipede thread, but it was a real rollercoaster ride. I'm actually thinking as I look back at the charts that the big EU trend late last year is the main factor in making profits at that time. Since then, not so much <insert excuses here>.

I'll start with a couple of things I'm trying to work out - I'm not sure where to focus on improving first;

I used to make many small attempts (ave 17 pip SL for entries, move to BE quickly), and I would look to cash in positions from around +400 pips. Your ratio is clearly different - I'd prefer less stop-outs and it looks like you don't get too many, but the thought of such a big stop is something I struggle with right now. From what I've read it looks like you're on the other side of 1:1 ratio on average - is there any science behind this or is this the balance you've found from your experience, or something else?

Next question I'm asking myself (ok, you :-) ) is, based on trading the top 24 pairs for example, how many of these 'third lot placed, no losses from here' positions might I see on average over a week / month? Basically, from that, how many bullets do I have - can I fire 20 a week or do I need to think more like 1 per day?

If there's regular profits being taken ~100 pips (appreciate that you might let them run further) the equity curve would have to be smoother than my millipede adventure, any comments on drawdown periods that are still important I should consider?

I know when it comes to averages there's a lot of 'it depends' in all this but if you have any advice I'd appreciate it. Apologies if something you've already provided on these hasn't sunk in yet.

Thanks in advance and Regards.
  • #1,339
  • Aug 5, 2015 2:58am Aug 5, 2015 2:58am
Hi Graviton,

you shared your trades many times, now I share a couple of mine, maybe we can talk about it. For me the important part is the execution and what you think about them from a risk perspective. I thought to discuss 3 similar but still different trades: GBP/CAD, GBP/AUD and GBP/CHF all long.

GBP/CHF: I start with this as this seems at the moment the easiest. Volatility is usually not much, the pair moves very steady upward with huge potentials. I have 3 positions running and I think for now I stick to 3. I will close one and open a new one like in many occasions you already discussed.

GBP/CAD: the road is a bit bumpier than above but oil prices are still down, fundamentals also confirm the trade so it looks good. Here I am not ready for profit taking as only 2 positions are open and I will look for the opportunity to open a third one.

GBP/AUD: now this is the tough one; the reason for the post. I have 2 lots running, both in the red. I had them running good and the very positive AUD news made of course a huge jump against me, when I was sleeping. I adjusted for higher volatility my SL so I do not get out on a fakeout. As I thought this news event can only change the long term trend in the short term, I thought there is no reason to close the trades. The downside movement from the very top of the trend was about 400-500 pips. So what I am not sure is how you would have handled this situation. Would you have also let your trades open before the news event because the fundamentals are clearly on the side of the GBP? Or would you have closed maybe one position and let the other one running? Or even closed both of them? I do think I found the bottom but I stick to my money management rules and as 2 positions are in the red I do not want to scale into losers. Rather I will miss this opportunity to get back at a better price.

Soon GBP news (half an hour) which of course can make these trades a bit even trickier.

I am interested how you see these situation and what you would have done.

All the best,
IBO
  • #1,340
  • Edited 8:33am Aug 5, 2015 8:07am | Edited 8:33am
Quoting IBreakOut
Hi Graviton, you shared your trades many times, now I share a couple of mine, maybe we can talk about it. For me the important part is the execution and what you think about them from a risk perspective. I thought to discuss 3 similar but still different trades: GBP/CAD, GBP/AUD and GBP/CHF all long. GBP/CHF: I start with this as this seems at the moment the easiest. Volatility is usually not much, the pair moves very steady upward with huge potentials. I have 3 positions running and I think for now I stick to 3. I will close one and open a new...
Hi IBO. I had the same three trades running. I agree with your analysis of the GChf and the GCad, but I closed the GA long when I awoke yesterday to find the RBA reversed it's official position and Stevens announced that the Aussie had fallen enough. That was a hard decision and it cost me some pips, but I have now nearly recovered them all in other trades. I decided at the time we just have to accept that we have no ability to predict the future, and when the ground beneath our feet shifts, we shift with it or we stand to be ruined. Of course, we cannot control central banks and we should never trade against a central bank. David and Goliath is a nice story, but in the real world Goliath would win the vast majority of those conflicts. The probabilities just do not favor keeping a trade that has turned bad due to a reversal in policy by a central bank. With that said, I do see some recovery in the GA now so perhaps the GBP can overpower the AUD in the longer term and my loss was unnecessary, but I have already taken it and moved on. Best success. -G
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