How to predict markets, Catch the moves at value

Ok feedback guys whats your view on leverage, theirs no right or wrong answers. For me it works as account size matters as 1% leverage is well within norms. And with a good size account income can be just right.

I

Yes perfect

think so much dennis, u r the best ::)))))

Thankyou for sharing yur work with us.

JL

Hi Dennis, one question if not much trouble:

Why on the chart examples i've seen, you do not use London IB and TK IB (you use only for NYO and overnight) ?
They are outside of your time for trading ?

TIA

JL

thanks for that pdf. Is your book be available soon.

some video can found this link to see market behavior http://forexwinners.ru/forex/beat-th...r-steve-mauro/

http://www.forexfactory.com/showthre...71#post9127971

Dennis - As suggested, I will participate in the discussion of MM. Are these two posts all you have to share on MM? I am gearing up to share my perspective this weekend (mostly Friday and Saturday night California pacific time). Before I participate, I need to know if you trade
- one pair one trade open at a time
- one pair several trades open at a time or
- several pairs several trades open at a time

(My apologies as I have not read this thread and I sincerely mean no disrespect for not following this thread)

Leverage is just one tiny aspect of MM and RM. Margin Management, Account Leverage, Effective Leverage, Currency Exposure, correlation base Volatility risk, Planned and Unplanned Event risk, position sizing based on liquidity, alteration of margin requirements by broker, trading capital at risk with broker and many more of these are hugely important. Assuming you are trading low leverage and decent size capital (+$50K), which broker do you use and/or how do you address capital at risk with broker going bust?

(Heads Up: I will be making some broad and bold statements possibly creating clutter)
EDIT: I cannot decouple Risk and Money Management. They both go hand and hand in my opinion

Vee

Excellent input as always, Yes we have not covered mm in any detail thus far, You have great questions I will answer as follows:

Pairs trade open when not trading Slots.:


quote=VEEFX;9128540
one pair one trade open at a time - one pair several trades open at a time or - several pairs several trades open at a time

All of the above. But for Several pairs open at a time I normally limit it to 2 opposite correlations.

quote=VEEFX;9128540
which broker do you use and/or how do you address capital at risk with broker going bust?

I use Dukascopy as a broker
Nothing is certain in the markets to protect myself as much as possible I use a Custodian bank , this way its only current exposure at risk with the broker.

Looking forward to your input, will be brilliant as always. Thanks

Not really, outside of my time, And I used to time each market open. I think that helped to develop more understanding of Great Trader Concepts which I have taken my own spin on what suites me. Ultimately you will take these concepts and put your own trading personality into it. For what you know already/ can compliment the positives together.

For me and this is not necessary for you. The activity on open and for example if its around the CPR. Would that not be my first entry of the day at a reasonable value.

If you take UJ today: Candle opened over Value but above PP and TC would it not be a good shot to time my first entry on BC long on the fade. I find thats all I need as far as timings go to kick start the Day. So I have entered long on uj at 102.19 to get my feet wet T1 102 .80

No, it wont be, theirs a lot of Copy right issues in the draft. As I am only representing my own Spin on other peoples work. To continue would have meant re naming concepts. That as purist I could never do.

Market time indicator - not sure if this is the adjustable version.

If you are charting Java, then let me know if this one is summer adjustable

1. Current Exposure at Risk = Used Margin towards open positions? if yes, how do you limit exposure to a maximum % of your total equity (Bank+Brokerage account?). How much % do you cap at? Do you use % of equity or % of account balance?

Both +/- ! I use current exposure at risk against equity = - 5% draw-down on Equity and 5% Usage of leverage = Under my Model - anything close to 500 pip loss will be a concern at around the 200 pip - levels 2+ 2 - ( USD per Pip per Every 10 K use of leverage max)

2. What do you do when max % exposure is reached? do you start closing profitable positions or losing positions or hedge(I think you hedge to freeze profits...

Correct I do not Hedge to Freeze a loss, as this closes of opportunities and makes fixing what is broken even harder. At 400 pips - I am at home at the screen. Max volatility level is 500 - pip cut off/close. (I know it sound primeval but it works for me and is disciplined) Counter measures of subject. I may close half loss ect.

3. when time comes to add/open new positions how do you ensure you have enough room to accommodate drawdown?

​Equity exposure positive and half profit taken of from open position, We adding back what we took of so use of leverage remain quite consistent. By taking half of we are enduring that we remember to bank. If loss on new postion is near = to the open profit of the remaining half in market i will close both. So minimum profit is first half banked.

Crude Example: + 50 at 1 lot take 0.5 profit + 50 = 50 USD in Bank and 50 usd in market. Add half position back negative 25 pips against = 0 profit in market and usd 50 in the bank.

If the above is loss, I close production....more apparent in points down

4. Do you worry about overexposure in a particular currency (EUR/GBP/JPY/etc) across your open positions? if not, why not?

Yes I do its always a concern. I been hurt many times before, hurt yes really hurt. Thats why I am very low on leverage and how many pairs \I trade at 1 time.
​My psychology is not how to make money, my concern is always not to loose self control over leverage. Simply UJ is my main pair and EU is my back up when UJ goes against me. I know many traders will say why not buy/sell both when your in profit to maximize profits. Thats not for me. EU is my opposite safe haven. So I can only worry about over exposure on Uj (Edit) and EU. I dont trade anything else unless running EA on slots, (Thats another subject)

5. What do you worry the most when adding positions to existing pairs?

Distance from initial entry, I may take of at 20 but most can be 50 to 100 pips take half. Amount taken of from initial profit. Clear Momentum and we are trading above last Handle. Todays levels and past History Support Resistance. What part of the 2 year cycle are we in. Are the fundamentals on my side.

6. How do you calculate position size? % of equity or balance? What's your maximum % drawdown this year to date?

Position size I think we covered it already above i.e. 1% use of Leverage on initial entry. Can get slightly wider up to 2% if covering on opposite correlation on negs

​Max open DD -15% I cant always stick to my rules but thats not released Draw-down but resulted in a bad positive month. Normal draw-down is Capt at 5%. That is due to low leverage and narrow volatility risk levels (-500 pips/$500 usd per every 10k of EQ 5%)

7. Do you move SL to BE?

I never use a stop loss unless I am faking my tp area on a running trade. To ensure a loosing trade gets closed. When I am in the -250 Concern zone prior to -500. I am auto alerted and I am at the screen to review then I may just let it run then after. Production switched of.. Most of my trading otherwise I am not around after setting market limit orders/TP Zones. I only work when I am loosing and I dont work that much on that to.

I do have Hidden Stops from EA. if I cant be at the screen. But I prefer to manage loosing trades against current market dynamics. Important for me is to leave a minimal TP target on any loosing trade.

8. Do you hedge? if you do, margin requirements change based on broker therefore affecting free margin when you hedge/unhedge.

I only hedge profits I never hedge losses. If I do hedge loss its reduces my leverage and locks margin. Sounds Good. No I like to run loss open, let the market work for me even when I am loosing.

9. do you have a daily/weekly/monthly target? if yes, do you stop trading once the goal is met?

Subconsciously I have 2000 pip target a month, I dont break that down by day or week because we know the markets are not of that nature. But yes around 1600 pips a bad month and 2000 pips on a reasonably good month. I do not stop trading when the goal is met. The target is always never much of a concern/controlling the risk keeps the factory producing.

10. Do you carry open positions over weekend? if you do, how do you manage event risks over the weekend?[/quote]

Winning trades no if there day traders targets. Position Trades most certainly if I am holding say 79 on UJ.
Loosing Trades same rule applies, will carry up to -500 pips even over the weekend, no overnight or weekend coms. Time is irrelevant in what I do on a loss. But its net impact is that it can slow down production as I may be at max leverage 5%

Now this is going to get me some nasty feedback from some . Normally a loosing running trade, I dont fiddle to much. Basically I am out at - 500. at the basics. It take the pressure of, wind down production on the plat, relax with family. Let the trade win or loose and when the market has done its work. I go back to work again. Net result..Happy trader no pain

Awaiting your amazing feedback on your road your leading us down! Bad Boy


Maximize size, minimize risk The concept of maximizing size and minimizing risk is a vital ingredient to any successful trading strategy

FOR ME THAT MEANS MAX SIZE OF ACCOUNT MINIMAL RISK EXPOSURE LEVERAGE = HAPPY LONG TERM TRADER ONLY IF THAT MEETS YOUR FINANCIAL EXPECTATIONS- I.E. LIVE WITHIN YOUR MEANS AND LEVE SOME FOR GROWTH

Copy paste from Order Flow

There are many traders that are scared of trading with big stop losses. They have tried to optimize their system to death to try to get the best possible entry price, and tweak their system and settings so they can get in with the smallest possible reasonable stop loss level.
Why do they want a small stop loss? Well, if they employ a % risk model, then a smaller stop loss means a bigger position size.
For example if the market moves 500 pips. There can be multiple traders trading that same move differently with varying stop losses and thus position sizes, and reward risk ratios.
Trader 1: Captures 500 pips profit, using a 250 pip stop loss, and thus has a reward risk ratio of 2:1
Trader 2: Captures 500 pips profit, using a 100 pip stop loss, and thus has a reward risk ratio of 5:1
Trader 3: Captures 500 pips profit, using a 50 pip stop loss, and thus has a reward risk ratio of 10:1
If all the traders decided to risk 2% on the trade, then:
Trader 1: Would make 4% return
Trader 2: Would make 10% return
Trader 3: Would make a 20% return
There are obviously varying degrees of profitability on such a trade. The trader that was able to get the best entry, position size with a smaller stop loss, and still win the 500 pip trade amount, will experience the biggest return. Of course the drawback to this, is that the trader that uses a 50 pip stop loss to capture a 500 pip move, will typically have more losing and break even trades than the trader using a 250 pip stop loss. Why? Because the bigger your stop loss, typically the bigger gyrations you can hold through, giving your trade more time to achieve your profit objective.
The trader using a 100 pip stop loss or greater is usually a swing trader or end of day trader that doesn’t want to be at their trading platform often and glued to their screen. The trader using a 50 pip stop loss is probably a day trader that likes to try to place a position intraday with a good entry and attempt to ride it for a swing trade.
Nothing wrong with either approach.
You shouldn’t be afraid of either approach.
There is nothing wrong with trading with big stop losses in the range of 100-300 pips. Just know that the bigger your stop loss, the lower your position size. You can still make a lot of money, you just need a bigger move.
Which brings us to the trading rule:
The bigger your stop loss, the bigger the move you should be expecting.
The bigger your stop loss on a trade, the bigger the volatility you should be expecting. If you can do that, then no matter which market you trade, you should be able to attain great reward risk ratios on your trades.
Therefore, in the forex market if you are placing trades with 200 pip or 300 pip stop losses, then you should be expecting a big move to the tune of 500+ pips or 1,000+ pips worth of attainable profits. Which means there needs to be order flow triggers and scenarios that will move the market that much.
Which brings me to the next point. If you are placing ten trades during the month on the same currency pair, all using 300 pip stop losses, I would say you are doing something wrong. The reason is that the market doesn’t make 1,000 pip moves ten times a month. That is almost impossible. Therefore you expectations are out of line with what the market volatility can be. In such a situation, better order flow research and timing the market is critical so you can better place trades that have reasonable stop losses in tune with the market volatility.
Back in 1992 when George Soros broke the Bank of England, he had a flexible mental stop loss of around 300-400 pips in place. He had good reason to use such a big stop loss. For he was expecting a big move to happen. When the market moved over 1,000 pips in his favor, the big stop loss strategy was vindicated. He was successful because he had a order flow and global macro reason for a big move to occur. He wasn’t relying on moving averages, stochastics , chart patterns, etc.
Don’t fall into the trap of using big stop losses with tiny profit targets. All sorts of traders attempting to use 200 pip stop losses with 20 pip profit targets. There are even some forex robots that still do this! They have high win rates for a short while and they think it is the holy grail. Lots of small winners rack up and it helps to instill a false sense of confidence in the trader. Then when the inevitable loss comes, it completely wipes out all your small profits and causes a loss.
You may ask, well what if I want to trade with a big stop loss but cannot find a big move to occur? Then you either need to find a way to fine tune your entry on a smaller time frame, or find another market that will make a big move, or skip the trade and wait for a better reason for the market to make a big move. You can read my previous article on what to do in choppy markets.
Trading Money Management Reminders
The bigger your stop loss the bigger the move you should be expecting.
There is nothing wrong with using 100 pip stops losses or 200 pip stop losses, so long as if you positioned sized like that, you are expecting a big move to happen.
You can position size for a 200 pip stop loss if you expect a 1,000 pip move to occur. Because that way your Reward Risk Ratio is still a very high 5:1. Now if you can time a better entry on an intraday basis with a 100 pip stop loss or 50 pip stop loss, that would be better.

[/highlight]

And there you go 102 64 Current price

Quoting jlongo
Hi Dennis, one question if not much trouble: Why on the chart examples i've seen, you do not use London IB and TK IB (you use only for NYO and overnight) ? They are outside of your time for trading ? TIA JL

Not really, outside of my time, And I used to time each market open. I think that helped to develop more understanding of Great Trader Concepts which I have taken my own spin on what suites me. Ultimately you will take these concepts and put your own trading personality into it. For what you know already/ can compliment the positives together.

For me and this is not necessary for you. The activity on open and for example if its around the CPR. Would that not be my first entry of the day at a reasonable value.

If you take UJ today: Candle opened over Value but above PP and TC would it not be a good shot to time my first entry on BC long on the fade. I find thats all I need as far as timings go to kick start the Day. So I have entered long on uj at 102.19 to get my feet wet T1 102 .80

1. So T1 now 102.80

It really should not be that easy. But it is which is the nature of this Thread!

Come on UJ

How to predict markets, Catch the moves at value

103 big handle see how it reacts, 20 minutes will be there if 15 bar closes above R1 at 102.80 Big Fibo.......Scare face...Come on baby do your thing

Nice one Dennis!

Yes all from opening range and the CPR. On a really slow day. In on the right Value at the right time. I remember years ago trying to survive, what was I thinking back then. Change of my life began when I discovered what the greats do and canned my Ego and became a product of there brain molding and obediently started the pain of learning what they do but my way.

VEEFX i.e. to the above VEEFX is another opportunity to learn his insights to. This is the attitude a trader must have and the ability to filter knowledge