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The Really Useless Thread

  • #142,501
  • Aug 19, 2016 4:08am Aug 19, 2016 4:08am
Quoting sisse
Nice and clean European opening and we are pretty much done for the session with only highlight of Euro entering in the traditional choose your poison time for the 3th time this year for the mid term swing which is perfect time to complete the 20 iterations. Sisse never leave a conversation open and today I am off the office and I want to start wrapping up this discussion as summer is pretty much over. I will be around to chat and try to wrap up all the points before we close all the iterations so feel free to jump, ask, reply, contribute, argue,...
I don't know much abt fa always trying to grasp from u ... But ta wise I see that not all of the gates are open but some of the flood gates are open ... Which we will see in a couple of sessions ... 
Re-Incarnated
  • #142,502
  • Edited 5:52am Aug 19, 2016 5:37am | Edited 5:52am
The last couple of iterations have raised lots of questions about the core TA price concepts in trading (flip, range, retrace, reversal, break out, S/R, etc). Before going into details I want to start from very basics. This is one of the first points that triggered this discussion and I think right now is the perfect time to wrap up this key point before opening the final iteration.

Quoting sisse
This is what I have been telling you for a while about timing and perspective. Lets move one step down....

Perspective is very important for analysis. Main issue is that human brain is not naturally wired to understand TIME in a static 2 dimensional chart. Its hard, especially for hyperactive traders that are used to only scalp in micro TFs to grasp how long in trading time is a candle (any TF) and how much information is inside of it....}

-> A mid term outlook takes weeks to months !!!! to pan out initially while to fully complete a mid term swing it can take over a year (or more depending on volatility). This makes very hard to translate a good direction analysis in to actual trading because the TIME required is very hard to understand in a static chart and thats why is seldom recommended to trade alone raw mid term swings but use them as key to success (direction) trading the inner ebb and flows ...

Look at the following charts.

1. Nobody would have a doubt that this is a downtrend. If I ask you how to trade that outlook the most obvious answer will be lets look for some kind of retrace and short.

Attached Image (click to enlarge)
Click to Enlarge Name: Down.png Size: 54 KB


2. Nobody would have a doubt that this is a range. If I ask you how to trade that outlook the most obvious answer will be led fade the extreme of the range until we get a strong break on the trend side.

Attached Image (click to enlarge)
Click to Enlarge Name: Neutral.png Size: 19 KB


3. These are the last 2 swings from a different perspective and adding ELAPSED TIME in the equation.

Attached Image (click to enlarge)
Click to Enlarge Name: Time.png Size: 51 KB


4. If I isolate the following range for example and I don't give you a +/- Timeframe for reference neither put the range in perspective look what happen?

Attached Image (click to enlarge)
Click to Enlarge Name: neutral 2.png Size: 26 KB


Some people may will just don't care and fade the low of the range, others that are bullish will buy cheap tickets at the extreme, or some others will be taken profit from the top waiting for the momentum break down , etc etc,

Point is without time and perceptive its very hard to navigate in a trade. Thats why trading micro TFs are so common. Impatience which lead to overtrading -> leads machine gun approach -> poor risk:reward -> no room for trade management -> lost in translation -> etc etc

Here is the outcome of the last compression which was the begging of the downtrend in point 1

Attached Image (click to enlarge)
Click to Enlarge Name: break3.png Size: 75 KB


If you are sharp enough you will see that the last few charts are the Euro last mid term swings until today ,....

--> To wrap up this point and to answer this: "But how do you go from short, mid and long term short outlook. To neutral outlook short term and now midterm outlook neutral?|"

It's all about perspective and time:

->Fact: Changing 'mid term outlook to neutral'
->You see it : crap is never going to go down, this is hopeless,this is going up | I am lost maybe I close, maybe not, etc
->I see it like : Without changes in FA circumstances we are not going to break down the range this year | Actively looking for cheap entries at the top of the range or at the mid term flip to test the lows.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #142,503
  • Aug 19, 2016 6:16am Aug 19, 2016 6:16am
Quoting sisse
{quote} ...which means?... we are in Neutral . If you want to 'visualise' whats is going on with all long/mid and short term in neutral imagining a bouncing ball to standstill...basically volatility will fade away on each leg up and down until we go 'flattish' : {image} So try to map that and you tell us if where are the reasonable tickets .... sisse
Hi Sisse

Firstly thank you , I watch and participate from the side lines , but thank you for spending your time to answer myself and for all the lessons.

I am getting my head around the bouncing ball ( great help in visualisation )

The last post you made, which should be directly above here.................has cleared my view immensely , I shall post my map on OIL later .

Again thanks
  • #142,504
  • Aug 19, 2016 6:32am Aug 19, 2016 6:32am
Quoting sisse
The last couple of iterations have raised lots of questions about the core TA price concepts in trading (flip, range, retrace, reversal, break out, S/R, etc). Before going into details I want to start from very basics. This is one of the first points that triggered this discussion and I think right now is the perfect time to wrap up this key point before opening the final iteration. {quote} -> A mid term outlook takes weeks to months !!!! to pan out initially while to fully complete a mid term swing it can take over a year (or more depending on...
This is brilliant post.
So true that we have no time and patience to wait.
I myself fired cca 300 bullets in last 3 weeks, not even full 3 weeks. And that's only on one account, trading several. I am the perfect example of overtrading and admire all traders that are capable to place one trade per week. ( imagine that this one goes wrong then...we would have to live 300 years to gain enough expirience )
PVSRA
  • #142,505
  • Edited 7:13am Aug 19, 2016 6:56am | Edited 7:13am
The second point I want to wrap up is about Patience, Noise and Risk.

I think the concept of mapping a trade before trading and defining areas for trading is pretty much clear in concept at least. However, I noticed that a few posters in the iterations are more obsess with trading extremes and cheap tickets rather than taking a proper R:R trade in a good direction.

--> Everything has trade-offs in trading. It's great to look for value areas (cheap tickets) but there is always a price to pay when trading. When trading value areas the price you have to pay is in patience and noise.

Main problem I see, it is a lot of traders around are taking good entries but they are flopping on the first whipsaw or giving up lost in translation before the trade even start.

On the other hand taking momentum trades is so exhilarating when one is right that make us loose perspective (overconfidence/i am going to be rich quick effect). You can clearly see this in some of the iteration (especially the news flows ones). The problem with taking more expensive tickets that don't require much patience to pan out is that they are always the RISKIEST.

-->I added to the never ending outlook chart (need to adjust for neutral and buy but the same principle) a cheatsheet that is self-explanatory.

Attached Image (click to enlarge)
Click to Enlarge Name: outlooksell.png Size: 356 KB
.

To wrap it up. Not necessarily (depends on the circumstances and factor in play) trading cheap tickets is the best option, neither are always available at the right time. Whatever is the best match for the particular case its VERY IMPORTANT to understand what are you going to have to deal with in terms of TIME (PATIENCE), NOISE (VOLATILITY) and RISK.

If you get cheaper tickets be prepare to sit tight and be patience. This require A LOT of effort and is one of the hardest thing to achieve. IF you get expensive tickets be prepare to be sharp and run fast, there is no room for mistakes. The better you get at this, the easier it will become.

-> The first real super fast swing ride with an expensive ticket is exhilarating and the adrenaline would make you feel in complete control and ready to take the world by a storm.

--> The first real super slow, choppy, well worked swing ride with cheap tickets would make you feel relax knowing that you know exactly what you are doing and your endless search for the next Holy Grail is finally over...

Is not this or that, is both and all the option in between ...the difference between a seasoned and amateurs trader is that the former recognise where he/she expects in terms of risk and patience before taking a trade.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #142,506
  • Aug 19, 2016 7:04am Aug 19, 2016 7:04am
Thanks so much Sisse for this excellent lesson!
This said, you mentioned:
->I see it like : Without changes in FA circumstances we are not going to break down the range this year |
For me, we have actually change in FA: impact of brexit in EU; US far away better economy than the rest of the world.
However, USD is weakening instead of going up! This exactly what I am not able to contextualize or have a rationale for it.
  • #142,507
  • Aug 19, 2016 7:08am Aug 19, 2016 7:08am
As Imirish said: market is penalizing USD because of no hiking and strengthening those easing and even cutting their rate!!! No sense!
  • #142,508
  • Edited 7:55am Aug 19, 2016 7:31am | Edited 7:55am
Patience is really all you need...if wrong on timeing and right on directions- just wait it out. EU has been in one large range for over a year now

if you do the math...you'll notice the one for 13 pips had to be in draw down of around 200 to be able to go back green...

I knew the direction (like you do IMRICH1), but I had very bad timing on the first trade. I noticed it, saw it for what it was and accepted I'd have to wait it out. The leverage was so small -200 pips didn't bother me in the least to scare me away from adding one higher

This was the very first 3 trades of my current 25 trade streak....it was the "aha" moment I spoke of before. Again- my own experience thus far from what I've learned from sisse
Attached Image
  • #142,509
  • Edited 8:18am Aug 19, 2016 7:57am | Edited 8:18am
Quoting Pharm0r
Patience is really all you need...if wrong on timeing and right on directions- just wait it out. EU has been in one large range for over a year now if you do the math...you'll notice the one for 13 pips had to be in draw down of around 200 to be able to go back green... I knew the direction (like you do IMRICH1), but I had very bad timing on the first trade. I noticed it, saw it for what it was and accepted I'd have to wait it out. The leverage was so small -200 pips didn't bother me in the least to scare me away from adding one higher This was...
What about risk %? Don't positions need to be too small to be interesting when stops are wide enough for 200 dd? (Unless of course one is either using a massive trading account or is willing to risk far more than the <2% per trade most see as a decent rule) just curious how it works. Maybe I'm looking at it the wrong way, I've been pretty good at that lately.
  • #142,510
  • Aug 19, 2016 8:17am Aug 19, 2016 8:17am
Quoting goosebone
{quote} What about risk %? Don't positions need to be too small to be interesting when stops are wide enough for 200 dd? (Unless of course one is either using a massive trading account or is willing to risk far more than the <2% per trade most see as a decent rule) just curious how it works. Maybe I'm looking at it the wrong way.
That is very subjective.....when I aim for 6-10% a month, I've found that even that caused me to start stressing over making my marks (6% easy, but 10% much harder with low leverage). So I abandoned that and am aiming for 20% a year as a general goal.

I've abandoned the "get rich in 10 years" ideal, and I'm aiming for the "retire rich" ideal. If it happens sooner great, if not so be it. But retiring rich is so much easier....2 trades in 3 weeks is boring, but also not nerve racking
  • #142,511
  • Aug 19, 2016 8:20am Aug 19, 2016 8:20am
Quoting Pharm0r
Patience is really all you need...if wrong on timeing and right on directions- just wait it out.
This style isn't for everyone and some people here totally abhor it, but horses for courses I say. The important thing to master if you trade like this is to adapt your position sizes accordingly. Keep in mind that even in a mid-term neutral range EU could easily reach the 1.16 handle, so those shorts entered much lower down are going to be thorns in your side if you sized them too large. You could almost say that the lower the shorts, the smaller the size should be. But if you increase size as price moves higher towards the top of the range, isn't this a form of martingaling (aka adding to losers)? And what if price breaks the top of the range, due to an obvious or not-so-obvious shift in fundamentals? The other problem is knowing when to get out and take your multitude of losses if this happens. As Keynes famously said: "The market can stay irrational longer than you can stay solvent."

Quoting IMARICH1
yes, my leverage is worse now because I added to my positions at the cheaper seats and now those seats are expensive and have over leveraged me
I think this solution might be too late for Imarich1's predicament. Rightly or wrongly, he has tied up a lot of his funds with shorts entered lower down, in the firm belief that EU should not be going up to the top of the mid-term range based on current fundamentals. He has listened to the advice and conversations intently, and participated eagerly, but still he has failed. I feel sorry for him and wish there was something more we could do to help. Your advice about waiting it out is well-meant, but it might just blow his account if price keeps rising.
You reap what you sow.
  • #142,512
  • Aug 19, 2016 8:22am Aug 19, 2016 8:22am
Quoting Pharm0r
{quote} That is very subjective.....when I aim for 6-10% a month, I've found that even that caused me to start stressing over making my marks (6% easy, but 10% much harder with low leverage). So I abandoned that and am aiming for 20% a year as a general goal. I've abandoned the "get rich in 10 years" ideal, and I'm aiming for the "retire rich" ideal. If it happens sooner great, if not so be it. But retiring rich is so much easier....2 trades in 3 weeks is boring, but also not nerve racking
I see what you mean. Thanks
  • #142,513
  • Edited 8:39am Aug 19, 2016 8:25am | Edited 8:39am
I do not think I'm one to preach on risk percentage per person though- that is way too subjective. Not all rules apply to all persons in all situations.

2% per trade makes no sense in forex. 2% risked per set amount of pips does make sense....so if -200 pips is -2%, then that means to lose your capital you'd have to go -10,000 pips on the EU, which is all but impossible within a span of over a year. Of course that depends on broker leverage....50:1 American leverage would make that -5 ,000 pips...again an unlikely move specific to EU

if we are talking another pair, then the pair's specific tendencies would have to be considered
  • #142,514
  • Aug 19, 2016 8:29am Aug 19, 2016 8:29am
Quoting NorthTrader
{quote} This style isn't for everyone and some people here totally abhor it, but horses for courses I say.
Absolutely agree! As I tried to post in the above one, I don't think I'm one to preach how someone should trade....nor do I think anyone is in a position to tell others how they should or shouldn't manage their capital

Agreed- I see the "adding to losers" as the anti-thesis to my approach, again I've avoided explaining in detail my approach in the above because it isn't my place to tell anyone how to manage their capital nor would I try to. All I'm trying to illustrate is that perhaps leverage is the issue if -200 pips gets you so close to losing your capital that you'd be angry/upset/scared

risk appetite is everything, and the approach mentioned isn't much different from equity trading if you think about it (minus of course the swap)
  • #142,515
  • Aug 19, 2016 8:32am Aug 19, 2016 8:32am
Quoting sisse
2. Basic price analysis give you more information TAwise that any indicator or tool in the arsenal ...and thats a fact:
The third pending point was about TA price entries and indicators. We discussed for a few pages a very basic and powerful entry base on price alone. It's pretty much clear that direction (as in outlook buy, neutral and sell) is key for swing trading. You can use any indicator you want, you can jump and down a much as you want, if you are in the right direction and manage risk properly the trade will pan out. Pulling the trigger become a 'simple technicality'. If you are in the wrong side nothing you use will change the outcome ...

To wrap up this point for iteration 19, lets try something very different and powerful that may like usual trigger some ahaha, whatever nothing new, bs and ignore sisse moments.


+++++Opening PRE table for the 9th Iteration in the second round to get in synch with the market +++++


-->Question 19: Choose your poison time in the Euro for the 3er time this year for the mid term swing. How would you position for a trade?

This iteration is a live trading set variation with a proper R:R and. It's titled: " Retrace or Reversal PART II - Frustration, Price & Indicators" and its aim to put price and indictors entries side by side in the context of trading direction.

We are going to do something different this time. For the pre scanning question.

--> Choose your FAVOURITE indicator for entries ASAP. Any lurkers that want to play/learn with this test feel free to jump in. I am only using common traditional indicators:

a. the good old MACD
b. Slow Stochastics/or similar Oscillators the only and best thing
c. Nay BS I want some price based indicators lets use Pivots,
d.All is predefined by nature, no economics, math or anything, the holy grail is in magic numbers and nature lets use Fibs/or related.

Remember this is just for entries to compare with price action not for a trading system,...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #142,516
  • Aug 19, 2016 8:38am Aug 19, 2016 8:38am
Quoting Pharm0r
I do not think I'm one to preach on risk percentage per person though- that is way too subjective. Not all rules apply to all persons in all situations. 2% per trade makes no sense in forex. 2% risked per set amount of pips does make sense....so if -200 pips is -2%, then that means to lose your capital you'd have to go -10,000 pips on the EU, which is all but impossible within a span of over a year. Of course that depends on broker leverage....50:1 American leverage would make that -5 ,000 pips...again an impossible move in FX
Right. No preach from me either (obviously not in a position to do that). I do it like this: figure out my entry and stop, adjust position size so that the risked pips equal the percentage of capital I am comfortable with risking on the trade. That usually falls to the lower side of .75% up to 2%. I'm probably a lot closer to retirement age than you are so "get rich quick" and "retire rich" are not wholly different timelines☺. Either way, don't much expect to retire on forex trading although that would pretty great. My goals are more related to mastering this challenging game.
  • #142,517
  • Aug 19, 2016 8:42am Aug 19, 2016 8:42am
Quoting sisse
{quote} The third pending point was
I dont use any indicator since I started reading this thread..have just concentrated on the flip level concept...would that be considered c. pivots...
  • #142,518
  • Aug 19, 2016 8:43am Aug 19, 2016 8:43am
Quoting sisse
For the pre scanning question. --> Choose your FAVOURITE indicator for entries ASAP.
Can we only choose one of those that you listed? I wouldn't use any of those personally.
You reap what you sow.
  • #142,519
  • Aug 19, 2016 8:46am Aug 19, 2016 8:46am
Quoting PAStalker
{quote} I dont use any indicator since I started reading this thread..have just concentrated on the flip level concept...would that be considered c. pivots...
Quoting NorthTrader
{quote} Can we only choose one of those that you listed? I wouldn't use any of those personally.
It doesn't really matter if you use them. The point is selecting one for the iteration, that way is not trader/system bias or indicator/chart fitting in the trade. Obviously keeping it in the common and traditional ones so its easily understood for all (who hasn't plot one of those in a chart, innit...)

@NorthTrader sure you can suggest but something simple and common. The point to show in this iteration is not about which indicator is good but the opposite, that even most sluggish old and simple indicator will work/fail in a proper/bad taken trade ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #142,520
  • Aug 19, 2016 8:47am Aug 19, 2016 8:47am
Quoting goosebone
{quote} Right. No preach from me either (obviously not in a position to do that). I do it like this: figure out my entry and stop, adjust position size so that the risked pips equal the percentage of capital I am comfortable with risking on the trade. That usually falls to the lower side of .75% up to 2%. I'm probably a lot closer to retirement age than you are so "get rich quick" and "retire rich" are not wholly different timelines☺. Either way, don't much expect to retire on forex trading although that would pretty great. My goals...
I was taught that is the correct way to trade :nerd:
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