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  • #143,661
  • Sep 29, 2016 12:50pm Sep 29, 2016 12:50pm
Quoting IMARICH1
Ok sisse! But, need to atleast post a chart for Pharm0r and we can tear it up later... sisse, Please post what we should be watching to understand market conditions and what is happening. I am watching DAX, 10 yr T-Bonds and news. You watch different things to understand the MARKET and its noise for me since I never really know what day to watch what..Oil? Gold? ES ect...... {image}
Perfect! Thank you- so in our trading right now, where we know fundamental direction is that stop loss a hard one (pending trade) or mental?
  • #143,662
  • Sep 29, 2016 12:51pm Sep 29, 2016 12:51pm
Quoting Earleone
{quote} Will not be nice at all. Many brokers will possible not be able to pay out the profits for your and other traders mid terms trades. If DB goes it will be bloody.
I am not interested in a broker that can't pay me even if it's WW3 ...such broker exists ! Richest investors on earth made their fortune during crisis time !
Get Rich or Die Tryin
  • #143,663
  • Sep 29, 2016 12:57pm Sep 29, 2016 12:57pm
Quoting Pharm0r
{quote} Perfect! Thank you- so in our trading right now, where we know fundamental direction is that stop loss a hard one (pending trade) or mental?
Mental............its where I draw the line and close. The biggest risk with this is if we have a SWISS moment again as we did a few yrs back. That destroyed alot of accounts......

Re: DB bank it appears some hedge funds have withdrawn but not majority "the report, citing a source and review of an internal document, said that a small number of the hedge funds that do derivatives business with the German bank have cut their exposure"

.....there is a fire inside as sisse stated. Government claims it will not get involved as this would not help Merkel and hurt taxpayers. However, who do the banks hurt anyway if they collapse.....taxpayer....
  • #143,664
  • Edited 1:08pm Sep 29, 2016 12:58pm | Edited 1:08pm
Quoting hoom
{quote} I am not interested in a broker that can't pay me even if it's WW3 ...such broker exists ! Richest investors on earth made their fortune during crisis time !
Yes . But DB is one of the biggest clearing brokers in the world and mostly all brokers we trade with is in need to get the money out from them. If they go under and money is locked in it is we the retail traders and small brokers that get the problem. Not Goldman Sacks and their like or the bucket shop brokers that is not sending your trades outside the house ( They will probably not pay you anyway ) .

I am sure we will manage to make money on it. I use well regulated broker with segregated accounts. But I will not be sure about getting anything if DB goes under with a boom.
Trading in the shadow of SM
  • #143,665
  • Sep 29, 2016 12:58pm Sep 29, 2016 12:58pm
Quoting Fisher755
{quote}Everybody makes mistakes either with direction or timing or both ... from time to time and it is good that past profits are secured with SL. At least accident SL ( wider ) should be in place always.
Exactly. So you're right in direction, timing unknown. The only point in a stop loss is a fundamental "oh shit". If your leverage is low enough, and you are right in direction, the technicals only show you timing. That goes to say, if you are low in leverage, and your timing is off- but your direction is correct, then why on earth would you accept a loss that doesnt have to be a loss with just a little bit more patience...THUS extending your timing.

If you're right in direction, but getting stopped out because of "timing" and extending your time line isnt an option, I'd argue that you are most likely over leveraged or completely impatient. Which goes again to say- if you're impatient you're probably over leveraged.
  • #143,666
  • Sep 29, 2016 1:02pm Sep 29, 2016 1:02pm
ok ...all calming down a bit on the wires and ...sorry for the abrupt interruption je je je but something big is cooking on the background ... Keep a extremely close eye in Euro losing 1.118x for the close (doubt but possible) as it will unlock a sharp clean sweep that will carry not only the FX board ...

Now back to the other chats... ....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #143,667
  • Sep 29, 2016 1:05pm Sep 29, 2016 1:05pm
Quoting IMARICH1
Ok sisse! But, need to atleast post a chart for Pharm0r and we can tear it up later... sisse, Please post what we should be watching to understand market conditions and what is happening. I am watching DAX, 10 yr T-Bonds and news. You watch different things to understand the MARKET and its noise for me since I never really know what day to watch what..Oil? Gold? ES ect...... {image}
Perfect! Thank you- give me a minute and I'll illustrate my point with the technical perspective
  • #143,668
  • Sep 29, 2016 1:17pm Sep 29, 2016 1:17pm
Quoting Pharm0r
{quote} Exactly. So you're right in direction, timing unknown. The only point in a stop loss is a fundamental "oh shit". If your leverage is low enough, and you are right in direction, the technicals only show you timing. That goes to say, if you are low in leverage, and your timing is off- but your direction is correct, then why on earth would you accept a loss that doesnt have to be a loss with just a little bit more patience...THUS extending your timing. If you're right in direction, but getting stopped out because of "timing" and extending your...
But sometimes you are wrong, dear. I would say in 10% of cases even. And this can drag out for a loooooooooooong time and eats your nerves and emotions, because if trade size would be really tiny, then not much profits to be expected.
Like the equities Brexit example. It took almost half of my Demo account profits because of wrong timing. Luckily it was just an experiment after Brexit and when I now trade equities on live account I always hedge it if TA suggests I am wrong. Now this is working very well, but in currencies hedging is a bit tricky.
Like now- take a look at H4 UJ and EU- they both are heading in the SAME direction.

Imho, safety first - before evrything else.

EDIT:
I'm not overleveraged, even underleveraged from time to time (100 pips bringing 1% sometimes only, risk a bit less). Impatient sometimes, but less and less as time goes buy.
PVSRA
  • #143,669
  • Sep 29, 2016 1:37pm Sep 29, 2016 1:37pm
Quoting Pharm0r
{quote} Perfect! Thank you- give me a minute and I'll illustrate my point with the technical perspective
sorry the candles are exaggerations to save space on chart

classic case of being stopped when you were right in direction
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  • #143,670
  • Sep 29, 2016 1:40pm Sep 29, 2016 1:40pm
Quoting Pharm0r
{quote} sorry the candles are exaggerations to save space on chart classic case of being stopped when you were right in direction {image}
Isn't that the whole point from trading from outside to inside in range and trading momentum breaks for a no return point SL ?!!

That's a typical rookie mistake , that's what it is about ....
Get Rich or Die Tryin
  • #143,671
  • Sep 29, 2016 1:47pm Sep 29, 2016 1:47pm
I can only chip in the last few pages conversation with the continuation of the pending post @hoom ...

Quoting sisse
​6. Define your position size .... Therefore: Your max stop size is $100 for each position is 100 ticks
...now we finally can establish your risk profile from an investing perspective

7. Risk Profile & Scenarios

Before we move to the mid term swing, I am going to use the short range first as example on how to define a risk profile. Chart is self-explanatory.

​
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Keep in mind that this is your investment profile map and its has nothing to do with your trading map or fundamentals or anything trade related. Basically, this mark your first and most important part of managing risk and thinking like an investor:

In a nutshell: Hoom do you want to put $300 for this potential investment? yes or now? is the profile and expected ROI in the next few weeks interesting for your capital? yes or no?

Thats about it there is nothing to see about managing trades or timing or nothing...that is your first and only investment decision. You take the investment TP1, TP2, TP3 or stops whatever comes first. No trailling, no management not nothing ....just quantifiable risk:reward

Nice. so what ? that doest tell much except to sit and wait.....well that leads to the second part of managing positions:

8. Act as trader​

--> The main job as a trader is: First, managing risk !!! not managing potential gains and here is where the fun and complex part start. Second, managing rewards and third managing time.

9. Managing Risk

Lets go step by step (@hoom or anyone who want to jump in )

-> If the most important job for a trader is managing risk the first think you want to do is reduce your average capital per trade.

What does it mean? It means your first task is to reduce your risk exposure before you even think in counting gains. So what will be the impact when price reach to TP1 in your risk profile?

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This first step is simple:

@ Entry
Risk: $300
Return:0

@ TP1
Risk: $200
Return: $200

Which means without doing any trade management you have reduced your Risk to 0

Simple and obvious, nothing new, but here I open the 1st Question

What would you do if price hits TP1 (1.11) and then retrace all the way back to your entry level (1.13)? We know as an investor we don't care and do nothing but what about as a trader?

Keep in mid that TA or FA is irrelevant for this example. We only care about perspective, risk and trade management....

TBC

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #143,672
  • Sep 29, 2016 1:50pm Sep 29, 2016 1:50pm
Why would you be trading brexit at all when you KNOW what the implications can be?? Especially with a leverage high enough to eat half your account?

TINY PROFITS ARE THE POINT. 50% a year on $2,000 starting will make you a multi millionaire! That's 4% a month

This is not an attack on you at all. This is what I'm trying to illustrate.

If you are using small enough leverage- then TIMING doesn't matter- DIRECTION does. We can make this even better by having even semi decent timing through TA, but why would you take a loss when your direction is correct?? Your brexit example, you knew your direction was incorrect therefor you're direction changes and you get on the right side
  • #143,673
  • Sep 29, 2016 2:03pm Sep 29, 2016 2:03pm
Quoting Pharm0r
{quote} sorry the candles are exaggerations to save space on chart classic case of being stopped when you were right in direction {image}
So, then theres another dynamic on direction vs time. I took a shitty trade here, and chart 1 (quoted) didnt work out. I'm on the wrong side of the short term market.

BUT, if you extend your time to mid term, now you're on the right side of the market with less than preferred timing, but not shitty timing. So the question becomes, does holding the trade for the possibility of it going green outweigh the time you'd be waiting for it to turn green? If yes then exit. If not, then you can effectively wait it out. That's up to you.

Like I said, another way of thinking if you are correct on direction, and low on leverage. The thing is, direction on the macro time frames is EASY to find and know. We all KNOW the EU is in trouble right now, so we know the direction. It's then a patience game on whether or not you can wait the market out, or if fundamental direction will change before your waiting is up. If it's not your cup of tea that's fine, I'm just showing a perspective. THIS IS THE SAME PERSPECTIVE OF BUYING EQUITIES FOR RETIREMENT (401k, roth, pension) etc etc etc
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  • #143,674
  • Sep 29, 2016 2:07pm Sep 29, 2016 2:07pm
Quoting sisse
... but here I open the 1st Question What would you do if price hits TP1 (1.11) and then retrace all the way back to your entry level (1.13)? We know as an investor we don't care and do nothing but what about as a trader? Keep in mid that TA or FA is irrelevant for this example. We only care about perspective, risk and trade management.... TBC sisse

As a trader , from a purely risk and trade management perspective , I add another trade for what it's worth !
Get Rich or Die Tryin
  • #143,675
  • Sep 29, 2016 2:10pm Sep 29, 2016 2:10pm
Anyways, just my thoughts- no attacks on anyone or the way they trade. now I have to step away and get my teeth worked on.

Fxtyrant is a good example of what happens when you are wrong on direction, and refuse to realize it using this method. So it goes to show- you must be right on direction, and realize when you arent. Also I'd say UCAD was a bad choice in pairs to trade.

The thing is- even though he's wrong on direction, the chances of him waiting it out are still pretty good. Even if it takes years. That's his own personal choice. This is trading with out a stop loss defined. However- if you're basing it on a time vs reward perspective such as I've tried to illiterate, the stop loss is a decision based on what your time is worth and whether or not you are wrong on direction. not on what number is wrong or what a candle has done.
  • #143,676
  • Sep 29, 2016 2:14pm Sep 29, 2016 2:14pm
Quoting Pharm0r
Why would you be trading brexit at all when you KNOW what the implications can be?? Especially with a leverage high enough to eat half your account? TINY PROFITS ARE THE POINT. 50% a year on $2,000 starting will make you a multi millionaire! That's 4% a month This is not an attack on you at all. This is what I'm trying to illustrate. If you are using small enough leverage- then TIMING doesn't matter- DIRECTION does. We can make this even better by having even semi decent timing through TA, but why would you take a loss when your direction is correct??...
I know , it is opinion exchanging.

I don't mind that you trade without SL . I only mind that I want SL, even if hit many times (even better for me, the more times hit, the less I care).
And I said AFTER Brexit (FA was favoring downside after decent retrace up). I just didn't use SL for days. It was valuable lesson, especially because it was free.

I definitly agree with Sisse that the first and most important task of every trader is to reduce the risk as much as possible. That's why I am using SL.

EDIT:
I'm taking a loss to reconsider my trade direction. And preserve my past profits. And preserve my peace of mind and my sleep. I can always re-enter at any time. And as many times as I want.

EDIT #2:

Yes, bingo! Fxtyrant! Exactly! ( I forgot about him )


"The thing is- even though he's wrong on direction, the chances of him waiting it out are still pretty good. Even if it takes years.!"
Please, bro. I don't want to be dead before my trades come out.

(...see what I'm doing- editing hundred times like you... )
PVSRA
  • #143,677
  • Sep 29, 2016 2:21pm Sep 29, 2016 2:21pm
@Pharm0r

You assume that one could define the absolute direction as a drawdown limiter ie risk minimizer which is absolutely incorrect IMO

Game changer happens , a simple headline could blow everything in your face , what you've built for years and you take SNB for exemple .

Sometimes we feel invincible , confident and on the right path but when reality hits...it hits hard .

You can do that many many times and succeed but let me quote Albert Einstein
Quote
The only source of knowledge is experience
Get Rich or Die Tryin
  • #143,678
  • Sep 29, 2016 2:29pm Sep 29, 2016 2:29pm
Quoting Fisher755
{quote} (...see what I'm doing- editing hundred times like you... )
God finally someone said it , you need to refresh the page x times to get his final comment and sometimes he simply deletes them !!!

@Pharm0r No offense intended of course
Get Rich or Die Tryin
  • #143,679
  • Sep 29, 2016 2:32pm Sep 29, 2016 2:32pm
Quoting hoom
@Pharm0r You assume that one could define the absolute direction as a drawdown limiter ie risk minimizer which is absolutely incorrect IMO Game changer happens , a simple headline could blow everything in your face , what you've built for years and you take SNB for exemple . Sometimes we feel invincible , confident and on the right path but when reality hits...it hits hard . You can do that many many times and succeed but let me quote Albert Einstein {quote}
Yes, and that too. Nobody knows the direction, we only have better or worse probability. FA can change quickly, just as TA.

Trading the stocks for example could be a real disaster without SL. Forex is maybe not that dangerous...

Quoting hoom
{quote} God finally someone said it , you need to refresh the page x times to get his final comment and sometimes he simply deletes them !!! @Pharm0r No offense intended of course
We are artists.. Need time for good peace of work.
PVSRA
  • #143,680
  • Sep 29, 2016 3:00pm Sep 29, 2016 3:00pm
Quoting sisse
...9. Managing Risk
Quoting hoom
{quote} As a trader , from a purely risk and trade management perspective , I add another trade for what it's worth !
Indeed. You scale in a position why?

Attached Image (click to enlarge)
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-> Because your job as trader is managing risk first:

@ Entry
Risk: $300
Return:0

@ TP1
Risk: $200
Return: $200

@ Scale in 1
Risk: $300 - $200 of locked in profit from TP1 = $100 capital at risk for the same TRADE!!!! which has reduced your risk from 3% to 1% on the trade!!!!

Meaning you are in the same trade (remember your normal scenario is still down the 1.09xx handle so nothing has change from an investment perspective) but this time your average capital per the same trade has been reduced to only risking $100 for the same investment !!!

 

  1. Q2: Can you define what are the new potential returns in the three scenarios TP1, TP2 and TP3 with the new risk profile?

Now i open also Q3 @hoom and especially @Pharm0r that have been particularly vocal today (I will have a few pointers on your comment later) and I think some of the upcoming lines may trigger some discussion on his comments.

 

  1. Q3: Assume that after we scaled in, price move down but stall at 1.12 handle without hitting back TP1 and go back up to the entry point 1.13. What would you do in point A? Scale in? Clear all? or Trail?

...tbc

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
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