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The Really Useless Thread

  • #147,361
  • Edited 3:37pm Jan 31, 2017 3:24pm | Edited 3:37pm
Quoting sisse
...now where are we in the Short term? --> Define you short term swing positioning MAP. We are here: chartupdate.png;2165792 You knew that already. Short term in the top of the range on cheap tickets available. All look terrible bullish and a shift in direction looks very tempting and nearly 'unavoidable' (not talking about FA or outlook just charts and TA), isn't it? Now we move to the third step: What is the only 'rule' for CONSISTENT [any]trading and the only thing you have to do first, second and third: --> Minnimize RISK Question 2: So if you...

short stop 1.098
  • #147,362
  • Jan 31, 2017 3:31pm Jan 31, 2017 3:31pm
Would say 1.088x and 1.058x.
  • #147,363
  • Jan 31, 2017 3:34pm Jan 31, 2017 3:34pm
Larger short stop at 1.109. That's a wide load. But that's where I would know beyond a doubt I had it all wrong.

But short term stop I'd put above 1.097 maybe 1.098.
  • #147,364
  • Jan 31, 2017 3:44pm Jan 31, 2017 3:44pm
The exact level will be 'irrelevant' as you and anybody else can do their calculations. Let assume we take the swing highs as reference for the conversation:

--> Price is currently at 1.080x lets put the max Short stops at 1.090x 1.098x . Exactly 180 ticks away.

Only now you can define your position size and scope:

 

  1. Your Capital Risk = $500
  2. Your Max Stop = 100 180 ticks


--> You will want to have at least 2 but no more than 4 max 5 positions to manage your position properly. Therefore:

 

  1. Lets assume you choose 3 positions for the sake of the example at $1 per tick to make it easier
  2. You need to split the size of those positions to match your capital risk and trade requirements. So each position will be worth +/- $150 $180 in capital risk.

--> You can dig into the backposts to check position management, reentries, entries, deleveraging, managing gains, etc ...those are out of the scope of this post.

So now we have all clear and before we move to the technicalities and timing of it

Question 3. Why on earth we don't trade the pullbacks if most of 'your' targets are almost at the ultimate highs or lows in general? Why on earth trade outlooks if you can make a lot of money in all sides?

...
sisse

PS: I didnt read you post so I corrected to your values with [xx....]

Pending conversations? PM for a chat...I am mainly in OTM now
  • #147,365
  • Jan 31, 2017 4:03pm Jan 31, 2017 4:03pm
Quoting sisse
The exact level will be 'irrelevant' as you and anybody else can do their calculations. Let assume we take the swing highs as reference for the conversation: --> Price is currently at 1.080x lets put the max Short stops at 1.090x 1.098x . Exactly 180 ticks away. Only now you can define your position size and scope: Your Capital Risk = $500 Your Max Stop = 100 180 ticks --> You will want to have at least 2 but no more than 4 max 5 positions to manage your position properly. Therefore: Lets assume you choose 3 positions for the sake of the example...
Because countertrend (direction wrong) gives you even more chances to lose. If managing risk is the most important part, countertrend works against that. Direction right, the rest falls in place. And there won't be opportunity to scale into a position, or at least at some point one of those opportunities will burn the house down.
  • #147,366
  • Jan 31, 2017 4:05pm Jan 31, 2017 4:05pm
...and we rolled. A storming month for bulls at the end that held steady all the way up to the 1.080x very slowly but without blinking. Nothing to update from the calendar M close with highs naked for the FED....

Not much to do across the board for now with same levels, same trades, same all across the board.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #147,367
  • Jan 31, 2017 4:14pm Jan 31, 2017 4:14pm
Quoting goosebone
{quote} Because countertrend (direction wrong) gives you even more chances to lose. If managing risk is the most important part, countertrend works against that. Direction right, the rest falls in place. And there won't be opportunity to scale into a position, or at least at some point one of those opportunities will burn the house down.
Right. Pullbacks always look easier to trade on hindsight. You will have to do your own research to get your own data. In general, main problem of trading against the trend (against the macro direction primarily) are the following:

-> Your W% reduce dramatically (Euro ref in those charts will go from 79% to around 35%)
-> You r:r wil be very poor (in average for similar short term trades you will expect a reduction from 1:4 or 1:5 to nearly 1:1 and even worst on a pullback.
-> Your natural stops will be almost permanently hanging on air and/or in 'I will just risk a handful just in case mode' ...dead by 1000 wound mode.

Now we will continue before the FED. But for next question 4 I let you do your analysis in depth with time:

-> Check back the 3 basic entry options we discussed in the back in Iteration 19:

4a. Choose an oscillator (Slow Stochastic i think it was)
4b. Choose a magic lines entry (Fibs we chose I think)
4c. Choose a Price ONLY entry (we have 2 very simple triggers around)

Ask yourself which one has already trigger? or will trigger next? .... Has any price entry triggered yet since the last 3 or 4 weeks? Use your short term chart (daily for ref not the direction chart).

...we'll continue later

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #147,368
  • Edited Feb 1, 2017 5:28am Jan 31, 2017 6:13pm | Edited Feb 1, 2017 5:28am
Here's what I got trying to stick to the rules laid out in that iteration. I think (not to attempt a jump on Question 5) the point being, same trades, same levels, same all. Expensive tickets or even to coin chester123's mediocre tickets, will almost always require some blood, sweat and tears and the end of a mid term swing will be more likely to see short term changes in outlook, retrace, pullback while opposing forces come together with more and more conviction and push/pull on price. I've been making what seemed to be logical entries in that expensive/mediocre area but really shouldn't be too surprised when they don't pan out given that's the playing field midterm. As far as which one of those will trigger next (leaving fibs out of it because how to use that tool is simply too subjective) stochastic Idk, I dont use it, but I imagine FED could produce a trigger there. I will be watching price though. It isnt unimaginable in the least that we get a solid rejection of a high just into the 1.08 handle. Also not unimaginable that candle gets tired, wicky and closes below 1.068. Obviously not likely but not unimaginable if there is some news. I'll be watching the run up to FED and after news (not necessarily for that trigger) and sitting on my gun so I can't jump it.

(figure of speech. Never sit on your gun)
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  • #147,369
  • Feb 1, 2017 2:19am Feb 1, 2017 2:19am
this shit is mine now

Inserted Video
"If The Fool persists in his Folly he will become wise." - William Blake
  • #147,370
  • Feb 1, 2017 6:43am Feb 1, 2017 6:43am
Uneventful European morning subdue to the FED today and Brexit/BOE tomorrow. Early session expected in NY with reports to kick start the day on top of the unexpected tweet from the US.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #147,371
  • Feb 1, 2017 7:30am Feb 1, 2017 7:30am
Major overshoot in ADP. All eyes on NY...

sisse

Quoting goosebone
Here's what I got trying to stick to the rules laid out in that iteration. I think (not to attempt a jump on Question 5) t...
We have a few points to cover before the FED so lets try to move quickly.

Before discussing the technicalities on your post. Next point is? ...managing risk again !!!..thats the only job for consistent results.

So far we have: Your capital risk -> macro direction defined -> Short term map defined -> Your max risk -> Your position size ....

Next step is one more time adjusting your risk one more time according to the previous posts:

--> You need to dynamically adjust your risk every single time you are planning to trade before you pull the trigger!!!!. If you are just parking a limit /blind order is nothing else to do but place them with stops (e.g Sell 1.0800 Stop your 1.0980) with the exact position size split in 2 / 3 or 4 parts to match your $500 risk profile.

However if you wait for a different trigger for example let's assume for a minute one of the triggers is 'trigger' for example the Stochastic trigger you posted and the exact entry end ups @ 1.0760 instead of 1.0800x. YOU MUST recalculate your RISK !!!:

 

  1. THEORETICAL ENTRY = 1.0800

    1. -> MAX NATURAL STOP = 1.0980
    2. -> RISK = 180 TICKS = +/- $500



  2. ACTUAL ENTRY = 1.0760

    1. -> MAX NATURAL STOP = 1.0980X (There is NO REASON to CHANGE this !!!!) ->
    2. -> NEW RISK = 220 ticks .
    3. You cannot use the same size and leverage any longer. If you enter here you need to recalculate that the 220 ticks risk = $500 not a penny more or less


Take advantages of your small size position. In Equities, CFDs, and FX you can adjust your size easily!!!. In Futures you wont be able to bypass the contract size therefore you will have to increase Capital ....but thats not for here...

This lead to the next point and 2 important hints/conclusion that I believe will trigger something in you:

Question 5: Where do you think the max reward / partial targets will be?

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #147,372
  • Feb 1, 2017 7:36am Feb 1, 2017 7:36am
610, 520, 460, 370, 270, 1.0 max .094
Short list :
610, 520, 460, 370
  • #147,373
  • Feb 1, 2017 7:38am Feb 1, 2017 7:38am
Quoting goosebone
610, 520, 460, 370, 270, 1.0 max .094
Too many [and TA wise very poor calculation as they are staggered next to each other showing confusion rather than conviction]

Choose max final target and 2 intermediate to make it easier.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #147,374
  • Feb 1, 2017 7:43am Feb 1, 2017 7:43am
Quoting sisse
{quote} Too many [and TA wise very poor calculation as they are staggered next to each other showing confusion rather than conviction] Choose max final target and 2 intermediate to make it easier. sisse
I see what you mean.
340 max target. Intermediates at 610 and 460
  • #147,375
  • Feb 1, 2017 7:47am Feb 1, 2017 7:47am
OK so now we have:

--> Your capital risk -> macro direction defined -> Short term map defined -> Your max risk -> Your position size --> Proper leverage and max capital risk positioning ...

You need to calculate potential REWARD. Why? to CALCULATE if the RISK is worth the investment !!!... The only job for a trader is calculate risk thats it...the rest is just technicalities ...

Question 6:

6a. f your max target is 1.034x what is your MAX POTENTIAL RISK / REWARD assuming your 1.0800 entry (you will need to calculate this dynamically on the exact other entries in live trading) ?

6.b What would be the EXPECTED ROI (Return of Investment) if everything goes ok?. Meaning you take T1 @ 1.061x T2 @ 1.046x and FT @ 1.0340 (assume a $1 a tick for the sake of the example)?

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #147,376
  • Edited 8:23am Feb 1, 2017 8:05am | Edited 8:23am
Quoting sisse
OK so now we have: --> Your capital risk -> macro direction defined -> Short term map defined -> Your max risk -> Your position size --> Proper leverage and max capital risk positioning ... You need to calculate potential REWARD. Why? to CALCULATE if the RISK is worth the investment !!!... The only job for a trader is calculate risk thats it...the rest is just technicalities ... Question 6: 6a. f your max target is 1.034x what is your MAX POTENTIAL RISK / REWARD assuming your the 1.0800x entry (you will need to calculate this dynamically on the...
6a Max RR =500:990, 1:2 (roughly)
6b Expected ROI = 990 or 198%(not sure I did that right, if you take risk out for ROI then 490 or 98%)

The $500 risk at 180 is 2.77/pip rounded to 3. Each tp added up =990 taking $1 off each time. 1:1.98 rr. ROI is not clear to me with forex because unlike real estate or equities I don't know whats on the investment side of the ratio.
  • #147,377
  • Feb 1, 2017 8:16am Feb 1, 2017 8:16am
Quoting goosebone
{quote} 6a Max RR =500:990, 1:2 (roughly) 6b Expected ROI = 990 (not sure I did that right, if you take risk out for ROI then 490)
Would this not be risk 540, reward 570 TP1, 1020 TP2, 1380 TP3?
Risk/Reward 540 : 2970 = 1 : 5.5
ROI 550%

Does this look along the right lines?
  • #147,378
  • Feb 1, 2017 8:19am Feb 1, 2017 8:19am
Quoting suntan
{quote} Would this not be risk 180, reward 190 TP1, 340 TP2, 460TP3? Risk/Reward 180 : 460 = 1 : 2.55 ROI 255% The above doesn't take into account the split positions - just a simple risk : reward to TP3. Does this look along the right lines?
Well that's what I had first but changed it taking into account $500 risk spread over 180 pips. And you would need to split those positions to get the math right I would think. But last math class I took was in eighth grade so don't take my word for it.
  • #147,379
  • Feb 1, 2017 8:21am Feb 1, 2017 8:21am
Quoting goosebone
{quote} Well that's what I had first but changed it taking into account $500 risk spread over 180 pips.
Yes I see it as 990 as well man!

190
190+150
190+150+120
  • #147,380
  • Feb 1, 2017 8:27am Feb 1, 2017 8:27am
Quoting workingforex
{quote} Yes I see it as 990 as well man! 190 190+150 190+150+120
Is it not 990 x £3 per pip = £2970
Risk is 180x £3 = £540

Apologies edited my original workings above.
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