20 pips a day is all you need! See what I mean..

[shakespeare515]

I really don't like this 1 trade a day concept that's taught to wannabe traders. I can cherry pick a trade that i 'think should' bounce or breakout with all the possible conditions in my favour, however what this ignores is the element of 'luck' every trader needs for each individual trade to work. Yes, 'luck'. What happens if you get unlucky on an individual trade, but then an equally good one pops up the next hour, you have to sit it out because you've done your one trade for the day and had a bad break, consequently missing the huge move later on??

The only advantage i can see is for the extremely undisciplined of novice traders who are trigger happy. But other than this one +ve, this concept will lead you down a road of disappointment when reality doesn't match your perception, i.e. you lose when you've just spent 3 hours trying to pick the 'perfect' trade. No one knows what will happen over 1 trade, but if you've got a statistical edge and discipline to execute without fail, then over a 100 trades you should fare better. But this means catching moves and no one knows when they're going to happen, therefore you have to take each one which match your entry criteria, not just one.

I agree JRP,

The number of trades is not important as percentage loss. stopping after a certain number of trades makes no sense to me, stopping after being down 2% for the day makes a lot of sense to me..

Sam

 

[gamma]

I really don't like this 1 trade a day concept that's taught to wannabe traders. I can cherry pick a trade that i 'think should' bounce or breakout with all the possible conditions in my favour, however what this ignores is the element of 'luck' every trader needs for each individual trade to work. Yes, 'luck'. What happens if you get unlucky on an individual trade, but then an equally good one pops up the next hour, you have to sit it out because you've done your one trade for the day and had a bad break, consequently missing the huge move later on??

The only advantage i can see is for the extremely undisciplined of novice traders who are trigger happy. But other than this one +ve, this concept will lead you down a road of disappointment when reality doesn't match your perception, i.e. you lose when you've just spent 3 hours trying to pick the 'perfect' trade. No one knows what will happen over 1 trade, but if you've got a statistical edge and discipline to execute without fail, then over a 100 trades you should fare better. But this means catching moves and no one knows when they're going to happen, therefore you have to take each one which match your entry criteria, not just one.

 

[JRP2891]

I'm glad that tickled you, although i fail to see the joke.

 

[lbranjord]

I really don't like this 1 trade a day concept that's taught to wannabe traders. I can cherry pick a trade that i 'think should' bounce or breakout with all the possible conditions in my favour, however what this ignores is the element of 'luck' every trader needs for each individual trade to work. Yes, 'luck'. What happens if you get unlucky on an individual trade, but then an equally good one pops up the next hour, you have to sit it out because you've done your one trade for the day and had a bad break, consequently missing the huge move later on??

The only advantage i can see is for the extremely undisciplined of novice traders who are trigger happy. But other than this one +ve, this concept will lead you down a road of disappointment when reality doesn't match your perception, i.e. you lose when you've just spent 3 hours trying to pick the 'perfect' trade. No one knows what will happen over 1 trade, but if you've got a statistical edge and discipline to execute without fail, then over a 100 trades you should fare better. But this means catching moves and no one knows when they're going to happen, therefore you have to take each one which match your entry criteria, not just one.

Devil's advocate here: I trade this way because all my capital is tied up in one trade a day. I wouldn't take another signal if I had the money to, I'd just increase the size of the initial trade. I risk 2-3% on one trade a day with 55% chance of it going in my favor and the extra edge that if it does go in my favor, my wins outsize my losses by 10% or so. 1 trade a day at 5pm cst everyday! But I don't try to time things out with my stops and targets, I let the market move and when the dust settles aka 5pm cst next day, I close my trade.

This system is my favorite as it allows me to have more time to do other things. Trading has a way of taking over your life if you let it.

Your point remains valid, but a good contrarian can always come out with a counter

 

[JRP2891]

Devil's advocate here: I trade this way because all my capital is tied up in one trade a day. I wouldn't take another signal if I had the money to, I'd just increase the size of the initial trade. I risk 2-3% on one trade a day with 55% chance of it going in my favor and the extra edge that if it does go in my favor, my wins outsize my losses by 10% or so. 1 trade a day at 5pm cst everyday! But I don't try to time things out with my stops and targets, I let the market move and when the dust settles aka 5pm cst next day, I close my trade.

This system is my favorite as it allows me to have more time to do other things. Trading has a way of taking over your life if you let it.

Your point remains valid, but a good contrarian can always come out with a counter

Fair enough, well if it works for you then that's the main thing. It doesn't resonate with myself but then it doesn't have to. At least you've answered with an intelligent response. You would've thought if someone's got time to dress up their dog (a lot of free time with 1 trade a day), then they might have a free window....

 

[barryb]

Fair enough, well if it works for you then that's the main thing. It doesn't resonate with myself but then it doesn't have to. At least you've answered with an intelligent response. You would've thought if someone's got time to dress up their dog (a lot of free time with 1 trade a day), then they might have a free window....

Hahahahaha!! He sure likes that pretty little dog, mmmm.

 

[lbranjord]

Hahahahaha!! He sure likes that pretty little dog, mmmm.

I have plenty of time to dress my dog. I bought the scuba gear with my Oanda check...

edit: actually I think i found a new avatar here!

 

[4xpipcounter]

I don't like stopping for any reason. If you see the setup, then trade it. If my trading is getting me down, mentally, then I need to take a break. But, just because I made a gaffe and got down a little for the day, I shouldn't stop.
Just throwing my opinion out there.
The one thing I disagree with, if the trader is a consistent loser, then he needs to go abck to basics, push the live account in the background, and rework on his demo.

I agree JRP,

The number of trades is not important as percentage loss. stopping after a certain number of trades makes no sense to me, stopping after being down 2% for the day makes a lot of sense to me..

Sam

 

[lbranjord]

I don't like stopping for any reason. If you see the setup, then trade it. If my trading is getting me down, mentally, then I need to take a break. But, just because I made a gaffe and got down a little for the day, I shouldn't stop.
Just throwing my opinion out there.
The one thing I disagree with, if the trader is a consistent loser, then he needs to go abck to basics, push the live account in the background, and rework on his demo.

I agree. I had one point in my demo trading where I quit for about four months, but that was a mental decision. I was beat up and needed a break.

Other than that, a trader shouldn't be saying "Let's quit while we're ahead" that's admitting that you plan to lose all that money at some point. Gamblers!

 

[barryb]

I have plenty of time to dress my dog. I bought the scuba gear with my Oanda check...

edit: actually I think i found a new avatar here!

Goddam, there are some some reeeaaal cute little dawgs on here!! Me luvs dressin up my dawg.

 

[Black Swan]

I don't like stopping for any reason. If you see the setup, then trade it. If my trading is getting me down, mentally, then I need to take a break. But, just because I made a gaffe and got down a little for the day, I shouldn't stop.
Just throwing my opinion out there.
The one thing I disagree with, if the trader is a consistent loser, then he needs to go abck to basics, push the live account in the background, and rework on his demo.

I draw a lot of sports analogies, 18 holes, you've boggeyed the first 4, still 14 more to play that day, whose to say if you're heads in the right place you won't finish the round up?

Similar with tennis, how many guys come back from 2 sets down? Centre Forwards who miss 3 shots then score a screamer...

I'm with you, if you work this job 6-8 hours a day you have to take your set up each time it appears in order to make the 'probs' work in your favour...

 

[lbranjord]

I draw a lot of sports analogies, 18 holes, you've boggeyed the first 4, still 14 more to play that day, whose to say if you're heads in the right place you won't finish the round up?

Similar with tennis, how many guys come back from 2 sets down? Centre Forwards who miss 3 shots then score a screamer...

I'm with you, if you work this job 6-8 hours a day you have to take your set up each time it appears in order to make the 'probs' work in your favour...

I agree with you if you are an intuitive trader and having a crap day.

If you have a more intuitive approach to trading, you can go on a negative slide real fast once you become discouraged. That's actually why I stopped trading that way. It wasn't something I could effectively monitor and adjust day to day. Whatever my first day was like seemed to define my entire week. I couldn't break out of a slide until I took a break and my emotions made it back to '0'. But I never see a point in stopping while you're doing well, if that is the case, trade until the session you usually trade winds down for the day. Unless market conditions become muddy.

Now that I trade a set of conditions, which is much more suitable to a left-brainer like myself, I must trade the setup each day and look for my results to roughly match my tests. The mechanical approach doesn't take into account the user playing 'favorites', so if I do, I've invalidated any backtesting and should not expect to see the results I planned for. I know the well-versed intuitive trader will beat me in performance every time, but consistency and measureable results are all I ever wanted.

 

[4xpipcounter]

Black Swan, I'm a sports nut, Great analogy!
It also sheds more of a light in the total mindset. If you win more than you lose, you know you are coming back, because the confidence lies in the experience. The same for trading. The reason for my previous comment is I know I'm a winner more than I am a loser. A few bad trades does not put me out of the ballgame.
I hate the Yankees, but I got to face fact, I know when they get around a .500 win percentage, they are due for some losing.
Here's a twist to the sports venue. The Yankees 55 MA is at .540, which is support.

I draw a lot of sports analogies, 18 holes, you've boggeyed the first 4, still 14 more to play that day, whose to say if you're heads in the right place you won't finish the round up?

Similar with tennis, how many guys come back from 2 sets down? Centre Forwards who miss 3 shots then score a screamer...

I'm with you, if you work this job 6-8 hours a day you have to take your set up each time it appears in order to make the 'probs' work in your favour...

 

[Black Swan]

I agree with you if you are an intuitive trader and having a crap day.

If you have a more intuitive approach to trading, you can go on a negative slide real fast once you become discouraged. That's actually why I stopped trading that way. It wasn't something I could effectively monitor and adjust day to day. Whatever my first day was like seemed to define my entire week. I couldn't break out of a slide until I took a break and my emotions made it back to '0'. But I never see a point in stopping while you're doing well, if that is the case, trade until the session you usually trade winds down for the day. Unless market conditions become muddy.

Now that I trade a set of conditions, which is much more suitable to a left-brainer like myself, I must trade the setup each day and look for my results to roughly match my tests. The mechanical approach doesn't take into account the user playing 'favorites', so if I do, I've invalidated any backtesting and should not expect to see the results I planned for. I know the well-versed intuitive trader will beat me in performance every time, but consistency and measureable results are all I ever wanted.

methinks you've totally missed the point, it has nothing do to with intuition, simply adopting a consistent protocol...

 

[lbranjord]

In mechanical trading, I can't see how a protocol to stop trading at a given point would be productive unless it was built into the initial testing stage of the trading system.

If there is a decent amount of human opinion built into your system, then adopting this protocol could be effective.

That was message I was trying to get across.

 

[shakespeare515]

I'm with you, if you work this job 6-8 hours a day you have to take your set up each time it appears in order to make the 'probs' work in your favour...

Disagree, Black Swan.. As a trader you are a detective. always looking for clues.. be suspicious of your signals.. just because you have a chart setup doesnt mean it is a good trade.. Is there news coming out? Is Bernanke speaking? Is it NY lunch time? Is your chart setup signalling Long eur/jpy but the dow is at -80 and still dropping? Are you near any longer term S/R levels?

There are ways you can increase your probability per trade. You find these situations by keeping a trade log and compiling your losers.. you will find correlations.. such as all jpy crosses correlate heavily with equity markets. so if your setup is calling for a direction on a jpy cross, then your equity markets need to be in alignment..

whatever your setups tell you to do you should also be aware of the market environment.. it will help you identify false signals.. therefore increasing your probability per trade. Nothing is going to give you 100% accuracy, but you can shave some good percentage points off your losing rate.

...good trades

 

[shakespeare515]

I don't like stopping for any reason. If you see the setup, then trade it. If my trading is getting me down, mentally, then I need to take a break. But, just because I made a gaffe and got down a little for the day, I shouldn't stop.

4xpipcounter,

If you are a seasoned trader who knows how you react emotionally to losses, then not having daily account drawdown "stop-losses" is probably acceptable. the danger is when a trader draws down 5-10% in a session, and that "make it back" mentality kicks in.. causing them to over leverage their next position, exposing them to even greater damage.. (margin call being the worst scenario).

Sadly, this is the case for most traders.. I have seen it too many times, in most cases it is one trading session that causes the demise of sophomore traders.

If you can put restrictions on your losses (say 2% per day) then you can guarantee that you will not have the same thing happen to you that destroys 90% of the losing traders out there.. you ensure that one session..or one trade doesnt end your career.. that at least gives you a chance to be successful.

getting consistent in forex is not just about seeing a set up and trading it. it takes time to get accustomed to the market and using daily "stop losses" gives a learning trader the time it takes to really have a chance at getting consistent.

...good trades,
Sam

 

[Black Swan]

Disagree, Black Swan.. As a trader you are a detective. always looking for clues.. be suspicious of your signals.. just because you have a chart setup doesnt mean it is a good trade.. Is there news coming out? Is Bernanke speaking? Is it NY lunch time? Is your chart setup signalling Long eur/jpy but the dow is at -80 and still dropping? Are you near any longer term S/R levels?

There are ways you can increase your probability per trade. You find these situations by keeping a trade log and compiling your losers.. you will find correlations.. such as all jpy crosses correlate heavily with equity markets. so if your setup is calling for a direction on a jpy cross, then your equity markets need to be in alignment..

whatever your setups tell you to do you should also be aware of the market environment.. it will help you identify false signals.. therefore increasing your probability per trade. Nothing is going to give you 100% accuracy, but you can shave some good percentage points off your losing rate.

...good trades

gawd 'elp us, and you *teach*? :whistling

 

[shakespeare515]

gawd 'elp us, and you *teach*?

Black Swan,

way to kepp the conversation on topic.. do you have a problem being disagreed with? Sounds like you dont have the emotional character to be a trader. You have to be ok with being wrong in this market, or your ego will make sure you lose..

I am not saying you are wrong tho, just disagree with your philosophy.

If you disagree with what I am saying, why don't you explain yourself for the benefit of all who read this board..
would love to have some intelligent debate.. if your up for it..

...good trades,
Sam

 

[lbranjord]

It sounds like the neverending battle of the intuitive trader and a statistical trader.

Maybe that's just me trying to fit everything into a neat little box when it's too complex for that.