Trading Made Profitable (TMP)

What Kinds of Drawdown Should You Expect?
The drawdown in your portfolio will typically be correlated to the level of risk exposure of your trading strategy. If your strategy is systematic, you can base future drawdowns on historical maximum drawdowns. If you are a relative value trader, who is looking for a currency pair to rebound after a substantial dip, then you should have an idea of how far you would let your trade move against you before you cut your position. Using historical data to determine theoretical past drawdowns is a great way to gauge maximum drawdowns or drawdowns over a certain period. But always remember, that your worst drawdown is yet to come.
The reward that you experience is predicated on the risk you take. If you are using a trend following trading strategy such as a moving average crossover, you should expect that the strategy will lose more than it wins, and, that you will experience prolonged drawdown, until the market begins to enter a trending phase.
When you design your trading strategy you need to be cognizant of the types of drawdown you expect to occur, and be willing to accept this drawdown as part of your trading business.

Read more here

UJ second trade of the week

13 Valuable Trading tips

 

1. BE PREPARED & FOCUSED before you strike.
   You need to stay focused, zone everything out and concentrate on nothing but what you are doing, that way you can make every strike count.
2. CONSTANT TRAINING to learn automatisms.
   This is important for the times when you are under big pressure because you will be more confident and you will know how to react under stress because you have trained for it!
3. Have a CLEAR STRATEGY.
   You need to make a plan with specific directions, criteria, risk limits, which brings me to my next rule, where you have to stick to your strategy!
4. Be DISCIPLINED.
   Sometimes you need to make tough decisions in order to succeed in the long term: you have to respect your risk limits, cut your losses, run your winners, and in other words, always be disciplined!
5. You need to SLEEP.
   You can’t play well if you don’t sleep enough. Likewise, you can’t think carefully without a good rest at night. That’s why you really need to conserve your energy and be fit for trading.
6. Learn to HAVE PATIENCE.
   A match lasts 90 minutes, and there are plenty of opportunities to score goals. Don't make hasty decisions. If you risk more and lose, you are likely to become emotional and start making bad trades.
7. Be AGGRESSIVE if you know what you’re doing.
   Unskilled or reckless tackles don’t help. Leverage is the same: higher rates of leverage aren’t your enemy, but you have to know how to use them properly.
8. LEARN FROM A LOSS.
   You can’t win all the games. But you can learn from your losses. You should analyze what went wrong, and apply it to the next game or trade.
9. Have a WINNER MENTALITY.
   If it was that easy to be a successful professional footballer, everybody would be doing that. But it’s not: you need have a winner mentality, always train harder, always push yourself more.
10. Team play and LEADERSHIP are very important.
    Being a good leader has been one of my priorities throughout my footballing career, especially as captain of the National Team.
11. It’s alright to TAKE A SHORT BREAK.
    Football is my passion, but even I, sometimes, need to take a short break. If you’ve been trading too much lately, and you are not sure where the market is going, take a break.
12. BE OPEN to the unknown.
    Nothing is certain in any game. For forex traders, this means that you need to minimize risk but it also means that you need to be prepared mentally for unexpected movements.
13. TAKE YOUR TIME.
    Trying to score too early is a common mistake because players often don’t realize that earlier isn’t always better. You need to cut your losing trades early, but you have to run your winners!

Never go for perfection; always shoot for consistency.

Technical analysis essentially serves two main functions:

1. For Identification: It identifies and describes past and present price action. It serves as a historical record of what has transpired in the markets. It provides a descriptive representation of market action. This allows the market practitioner to observe how the market has performed in the past, which includes its average volatility over a specified period; its highest and lowest historical price extremes; the common areas of consolidation, average duration, and price excursion of trends; the amount of liquidity and participation in the markets; the average degree and frequency of price gapping; the impact of various monetary economic announcements on price, and so on. This information is especially critical prior to any investment or trading decision.

2. For Forecasting: Once a particular price or market action is identified, the practitioner may now use this information to interpret what the data actually means before inferring future price action. This inference about potential price action is wholly based on the assumption that price patterns are repetitive to some reasonable degree and therefore may be used as a basis for price predictions.

Mean Reverting versus Non–Mean Reverting Approach
The type of technical studies employed also depends on the approach taken by traders and analysts with respect to their personal preferences and biases regarding the action of price in the markets. Basically, traders either adopt a contrarian or a momentum‐seeking type approach. Being more contrarian in their approach implies that they do not usually expect the price to traverse large distances. In fact they are constantly on the lookout for impending reversals in the markets. In essence, they expect price to be more mean reverting, returning to an average price or balance between supply and demand. Those that adopt the mean‐reverting approach prefer to employ technical studies that help pinpoint levels of overbought and oversold activity, which includes divergence analysis, regression analysis, moving average bands, and Bollinger bands. They prefer to trade consolidations rather than trend action. They normally buy at support and short at resistance. Limit entry orders are their preferred mode of order entry. Conversely, being more momentum seeking in their approach implies that they usually expect the price to traverse large distances and for trends to continue to remain intact. They are constantly on the lookout for continuation type breakouts in the markets. In short, they expect price to be more non–mean reverting, where demand creates further demand and supply creates further supply, both driven by a powerful positive‐ feedback cycle. Those that adopt the non–mean reverting approach prefer to employ technical studies that help pinpoint breakout or trend continuation activity, which includes chart pattern breakouts, moving average breakouts, Darvas Box breakouts, and Donchian channel breakouts. They prefer to trade trends rather than ranging action. They normally short at the breach of support and long at breach of resistance. Stop entry orders are their preferred mode of entry into the markets.

usdjpy H4 chart after nfp

Hi Hasib, thanks for sharing your system and additional thoughts on trading psychology. I appreciate your time and efforts, and I subscribed. Could you share the 3 or 4 EMA settings you are using? Thanks and keep up the good work you've done.

regards
BT

Four Basic Assumptions in the Application of Technical Analysis
There are four underlying premises associated with the application of technical analysis, namely:
1. Price behavior is expected to persist until there is evidence to the contrary.
2. For every bullish indication or interpretation, there exists an equal and opposite bearish indication or interpretation for the same price behavior or phenomena.
3. Extreme bullishness is potentially bearish (and extreme bearishness is potentially bullish).
4. A technical tool or indicator has no real significance except for that attributed to it by market participants.

Hello
BataviaTrade

I use 21, 50, 100 ema for short term I use 7 or 8 or 5 ema

regards
hasib

gold s&p500 and usdjpy Daily chart

Hi Hasib I apologize, did you mean:

ema 21, 50, 100 ==> short term ? Which is H4, H1 and lower?

ema 7 or 8 or 5 ==> long term? Which is all above H4?


Are we talking about the system from the chart in post #1 (attached)? Because I see also different charts with different indicators posted in this thread (like the posts above this post). So I am a bit confused.

regards
BT

you can use 8 , 21, 34,80 ema for market direction in h4 chart.
Since eam is just helping tools I don't always use ema. but using ema will help you to understand market condition. I also use difrent type of macd too.
if you really want to trade this system you can download the file with this thread and follow it religiously.
hope that help you.

nice profit this week

Hi hasib,

Thanks for sharing. would you mind to share the highlighted ndicators?

you will fiend here

Constant Chart Measures
There are five types of constant measure charts, namely:
1. Constant Time Charts—bar closes when a specified time interval is met, for example, Candlestick Charts, Bar Charts, Equivolume Charts
2. Constant Range Charts—bar closes when a specified excursion in price is met, for example, Point‐and‐Figure Charts and Renko Charts
3. Constant Volume Charts—bar closes when a specified volume is met
4. Constant Transaction (Tick) Charts—bar closes when a specified number of transactions (trades) is met
5. Constant Volatility Charts—bar closes when a specified amount of standard deviation or ATR is met