(binned per thread starter's request) Breaststroke's Trading

del

Looking forward for your trading strategy, sounds interesting. By breaststrokes, I guess you mean your strategy have high win rate?

Hi,
Thanks for sharing your past. Waiting to see good strategy!

Hi B,

Interesting introduction. I wish you a winning and safe swimming. Be aware of the sharks.

All the best,

Khalil

This will be interesting. Thank you for taking time to share.

cheers
hannele

Hi Everyone,

Thank you all for your warm response. I have made a new account at pepper stone.

Funding it might take 2,3 days because of the Easter holidays and the delays it is causing.

But I have connected this new account to myfxbook and fxstats. For some reason, Forexfactory's trade explorer is giving me error. I have submitted a support request, hopefully it should be sorted shortly.

Links to myfxbook and fxstats have been added in the first post.

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Any idea how to solve this? All details are correct as they worked at Fxstat and myfxbook.


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I believe in spirit of transparency, I should mention that I have a similar thread at 2 others forex forums to interact with a wider audience. (whole purpose of all this).

I have touched on major points on how I trade in first post. Following is some more information which might interest readers.

 

1. Chartist to an extend that I look at the price levels later (when I am validating a setup) and charts first.
2. Contrarian in spirit. For last 2 months, all major investment banks are saying to short any aussie rallies. Meanwhile aussie has shot up 700 pips. So being contrarian with money management pays off.
3. I don’t like to trust anyone else' market reading. But I do consider any views which signal potential major risks. Something like change of leverage on HKD by many major smart brokers recently signals massive risk to me and if I were to trade USDHKD(which I don’t), that would be the point I would stop and go flat on all HKD positions.

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Account has been funded. So I am looking for trades now. Fxstat and Myfxbook live links are given at top of the first post.

ARTICLE: How to avoid Armageddon events like SNB removing CHF ceiling in Jan 2015 (https://www.breaststroke.org/armageddon/)


You can't. You are most likely too small a fish. Events like this wash out large hedge funds (http://www.businessinsider.com.au/r-large-everest-capital-hedge-fund-closing-after-swiss-franc-losses-bloomberg-2015-1). You are just a boat in an ocean, you can't fight with ocean waves. You can only adjust your sails and be prepared.

Events like this are only thing which personally scares me from trading. Not losing x% of my account on a single trade. That is cost of doing business. So I have given it a long hard thought on how to avoid complete capital wipe-out in such in instances. As I believe it is matter of time before a next one appears. May be next time it would be meteor or tsunami and not a central bank. But you can bet your ass it is going to come. Following is what I personally do to save my own trading capital:

HAVE PENDING STOP ORDERS. ALWAYS.
I shouldnt have to explain this. But there are many people who dont like stop orders. They think they are always keeping an eye on market and would be quick enough to respond to any event. Let's agree to this for sake of the argument. Even then have a crazy stop loss 1000 pip away for the time when markets go to haywire. Pending order are executed by the broker's server in split millisecond once stop loss price is hit. Meanwhile, even if you click close on your platform exactly at the same time, latency alone will put you in a very disadvantaged position. It would take hundreds of millisecond for your order to reach the broker's server and by that time, people like me with pending orders would have consumed all available liquidity.

STOP TRADING PAIRS WHEN BROKERS ARE REDUCING LEVERAGE.
Brokers like dukascopy (https://www.dukascopy.com/swiss/ch/about/ournews/?news=200210) and many others are vigilant and they reduce the available leverage on selected pairs if they expect large sudden movement in them. They do it to save their client balances going in to negative. By the same logic, we should avoid those pairs as well. This simple trick would have made many stop trading CHF pairs early 2015.

DON'T FIGHT CENTRAL BANKS.
Soros (https://en.wikipedia.org/wiki/George_Soros) might have made a billion betting against Bank of England. But it is unlikely that you have enough ammunition to fight such a war. I am not even saying to not go against central bank, I regularly do that myself. Trick is not go bonkers on position size and to use stop loss. Dont assume that central bank is too weak to act. Hell! They dont even need to act. A single phone call (http://education.forexlive.com/!/usdjpy-boj-does-a-ring-around-to-check-rates-20160210) from central bankers to interbank dealers will likely wipe out your capital if you over leveraged.

LET ONLY PROFITS RUN.
Seriously! What is worse? A position already in 400 pips in profit getting wiped out with sudden movement of -500 pips in pair or a position in 400 pips loss and getting hit with another -500 pips of sudden movement? SAVE YOUR CAPITAL, keep your head above water and survive for another day.

USER BROKERS WITH LARGE LIQUIDITY (and fast execution).
Generally large name brokers have large liquidity pool. Also, it takes a lot of effort on brokers part to get their hands on multiple liquidity pools, hence no brokers can stop itself from bragging that it has deep liquidity if they have made an effort. So we can pick from the list of brokers which are bragging. Now a days, many brokers even show available liquidity they have per pair, so choosing isn't that hard.

USE HIGHER LEVERAGE ACCOUNTS.
My broker allows me to choose leverage. In cases like this, always always choose the highest leverage account. Even if you are not going to use high leverage, this will give yourself some room to avoid unexpected margin call when you are in multiple positions and unexpected happens.

DON'T KEEP ALL OF YOUR TRADING CAPITAL IN TRADING ACCOUNT.
Not always, but brokers are less likely to chase negative balance even if you were to experience one despite following all the above tricks. So use leverage to trade. For example, you trading capital is $10000. Put $5000 in trading account and use same lot size as you were with $10000 in account. If $5000 gets wiped out. You still have half of your capital available to rebuild another innings.

Favourite timeframe is H8. But from time to time I might look at other timeframes like H2 as well.

I already replied the following to another thread, but for the sake of keeping this journal up to date as well here it goes:

I almost trade naked, other than a couple of moving averages which I use for basic filtering there is nothing else on the charts.

I especially did away with any thing which can not be overlayed and required a separate small window at the bottom of the main chart (oscillators etc) long time ago.

Week 1:

I had 1 break even, 3 losing and 1 profitable open trade last week.

All losing trades were executed as per my understanding, it just didn't work out. Price moved against before moving in the intended direction. But thats how it goes in trading. There is nothing which I believe needs improvement.

The profitable trade is still running and will remain open over the weekend. Let's see how this will play out next week.

The BE trade is one I wanted to talk about. I believe trading will public eye effected me here. Like I have said in the first post, stop losses are sometimes moved to BE. For this trade, I really just hurried to move the SL to BE just because I felt eyes were on me. Price pierced through the BE SL by 6-7 pips before moving over a hundred pip in the intended direction. Hopefully I will grow out of this mentality soon that I need to cater for public eye and just do what I do. Indeed, that was the purpose of this thread.

BE Trade:

I know the feeling

Stick to your plan regardless of watching eyes.

[quote]

Pick one: Stop Loss or Margin Call.

c) Take profit

Hahaa! True that

An issue with trading 28 Paris composed of 8 unique major currencies is you are bound to experience effect of pair correlation.

1. Firstly, every pair is correlated to other pair(s) at least to some extend. [1]
2. Secondly, one pair is correlated to another till it isnt. [3]

These statements might seem contradictory but they arent.

After given it enough thought and testing multiple methods to manage correlation, I have come to conclusion that correlation is best dealt by limiting VAR (Value at risk) rather than messing with position sizing or SL settings.

At any given point of time, I shall not put more than x% of my account at risk through use of SL. Right now this x% for me range between 3 to 5%.

So I will take all signals that are valid as per my understanding, despite the fact that some of them might appear in the same direction on correlated pairs, UNTIL total VAR exceeds x%. When it does, I will either have to neutralize the risk on existing pairs by moving SL to break even effecting elimination any risk or will not take the new signal.


[1] Generally AUD = NZD and EUR = GBP.
[2] Minor crosses like NZDCHF and the likes are practically just ratios of their majors. Well! all crosses are ratios in practice, but some minor crosses have no weight of their own i.e. NZDCHF and the likes.
[3] It is easy to see here (http://www.myfxbook.com/forex-market/correlation/AUDJPY-EURJPY). First, correlation is different for each time frame. Pairs correlated in 5M are not correlated in 1D. Also, pairs can be correlated to each other due to market sentiment till their correlation goes away. A good example can be of JPY and CHF, which fundamentally become stronger when market is risk averse. But as soon as the risk averse sentiment goes away, this correlation brakes.

Public trading keeps on effecting me. Very happy now that decided to iron out these glitches.
~ -3.5% at the moment because didn’t take a trade which went on to become +4%. Plus closed a trade early due to invisible pressure of public trading.
All in all I believe I should have been somewhere around +1-2% if I would still be trading privately.

Stay tuned!

For me , I would be more comfortable and focus more on the trading if without the TE , TE effect some traders trading performance

One of the hardest thing in trading at times is … to NOT do anything.

1. NOT entering the trade.
2. NOT hitting that take profit button.
3. NOT moving stop loss.

… to name a few


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At the moment, I am at -2.64% after making 1.7% last week.

Featured trade:

Balls of Steel (https://www.breaststroke.org/balls/)

There are 2 giant steel balls in the heart of the city I live in. Locals are actually very touchy about it. There have been fights on where they should be placed and whether they should be altogether removed or not.
These are exactly the size of balls a trader need to let winners run and losers die.

Last couple of weeks have been quite interesting.

First, I missed a few good higher time frame trades due to other commitments.
Second, my schedule has changed in a way where now I am able to really sit on my trading desk for a while and enter trades on a smaller time frame.
I believe, I am not a bad scalper at all. But the heart wants what it wants (https://www.youtube.com/watch?v=ij_0p_6qTss&feature=youtu.be&t=102) (swing/position/longterm trading) and the way I trade lower time frames currently is that I focus on participating in the market from a low risk point then take some profits off the table and keep a smaller size position of about 1x leverage open after moving SL to BE. This gives me some quick small wins and allows me to potentially position myself for longer term trend.

Monday, which was public holiday in Australia went really well. Up 1%. Tuesday was slightly better 1.1% or so. By then I was out of all the drawdown.

But the featured trade of the last week is the losing USDJPY trade.



Now, USDJPY moved about 300 pips as many would know on BoJ doing 'nothing'.
(This is exactly why I preach SL. And I had a 0.4% SL for this one or so I thought)

Turns out that the EA I trust to set SL automatically has a bug. I entered in this trade before the news with a small deleveraged position. News hit the
wire and the price started falling before my eyes, which is really ok as this happens and you can be either right or wrong on any of your trade. But when it crossed a hundred pip in the matter of seconds instead of hitting ~ 25 pip SL, I realized that I have to intervene manually. Still I got out for a loss of -1.5% ... which wiped out majority of the other gains acquired earlier in the week. I think I have found the bug in trade manager and have reported it to the developer. Hopefully they will sort it out soon.

Meanwhile I have learned to manually verify that trade manager has set SL in every trade. This will make sure that I can keep participating in the market after a losing trade. That is a traders only job, to keep participating the market (from a position of low risk). Everything else is just an explanation. (use SL, letting winners run, avoiding news, trade trend etc etc)